I’m no SaaS expert and I don’t know about its best pricing models or strategies. However, I just want to highlight a “best practice” that I have noticed recently which I believe will help you as a marketer.
When I did a quick research on the different SaaS pricing models I realized that none of the blog posts I have come across highlighted this particular strategy. So I decided to share it with you and I believe it can be applied to (almost) all things cloud.
Just in case.
Software as a service (SaaS) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. It is sometimes referred to as “on-demand software”.
If there’s a SaaS product that I love the most then it has to be Evernote. Because that’s the first (non-Microsoft and non-Google) cloud productivity service that I have ever tested and fell in love with (thanks to Google Notebook’s demise).
As you probably know, Evernote is now a clear dominant in the SaaS productivity space. Of course, there are a lot of other (popular and useful) SaaS products but I don’t like any of them (including Dropbox) as much as I do Evernote.
Evernote was offering just one paid plan (called Evernote Premium) until last year (ignoring Evernote for Business) and then they introduced another level of paid plan called the Evernote Plus.
Evernote Plus costs 50% less than the original Premium plan but still I didn’t care much about its pricing plans as the free plan was offering almost everything I (and probably you) need. Besides, I have always considered Evernote’s paid plans as expensive.
Wait, I’m pretty sure that you won’t agree with me but I was thinking like: Evernote Premium costs $49.99/year while Microsoft Office 365 (with a ton of apps and features and add-ons) costs only $99.99/year.
And I do understand that it may not be a good idea to compare Office suite with Evernote but anyway that’s how I judged it and that’s why I refused to go Premium all these years.
So, what’s changed now? Just one thing: Evernote’s billing.
Evernote’s pricing strategy was always simple and clear as they followed a freemium model. In other words, Evernote was offering the app for free (without limiting the features in a significant way) and was offering paid plans for super-users and businesses.
However, the problem was it looked expensive (at least in my eyes) for non-U.S. customers. For instance, Evernote Premium plan’s pricing has always been $49.99 but if I’m paying in USD then now it costs 40% more than what it used to cost 4 years back (because of a depreciating local currency).
What did they do now? They went local.
They have started billing in local currency. And that’s not all. It’s heavily discounted too.
A few days back I was forced to buy Evernote’s Premium as the free version didn’t support “Account Switching”. So, I just wanted to purchase it for a month and I noticed that Evernote’s pricing plans are now localized.
Just in case if you couldn’t figure it out. Evernote’s paid plans now costs 50% less in India than what it costs in the U.S. In other words, it now costs less than $25/year for the Premium plan and $12/year for the Plus plan in India.
And it is such a fantastic pricing strategy that I couldn’t stop myself from writing about it.
Related Reading (From Across The Web)
- 5 Key Learnings From Analyzing Top B2B SaaS Pricing Pages
- What Makes Freemium Work?
- 12 Different SaaSy Pricing Strategies
- How 9 SaaS Companies Hacked Their Growth
- 10 SaaS Value Propositions You Wish You Had
If you are billing in local currency then it’s not only going to make it attractive but your users will love it (even if you don’t discount the price). Because it means they won’t have to pay extra forex charges and it makes future billing more transparent.
Pricing is a function of marketing. — @LincolnMurphy
By the way, Evernote (obviously) is not the only company that’s billing in local currencies, but I haven’t seen another product that’s offering a massive 50% discount just because the billing currency is different.
For example, GoDaddy and Apple’s App Store started billing in local currencies several years back but that didn’t change the pricing at all. And they have been regularly revising the prices upwards/downwards depending upon dollar’s movement against the local currency.
Happy Marketing! :)