Software as a Utility — Power back to the users.
Software as a Utility is our way of ensuring users are only charged based on value added.
At Boost Linguistics we spent a lot of time deciding on a pricing model. The final decision took us two or three months to figure out.
While debating what the best option was, we decided to lay out the key questions. We decided that the biggest question we needed to answer was, “What will be best for our customers on launch?”
The Beginning — April 7th, 2017
I googled, “How to set a SAAS pricing model”, the search was a nightmare. After reading the posts from the first 3 pages I discovered a trend. Articles by consultants on the topic would mention to check out your competition’s pricing. Others spoke of the terrors of competition based pricing.
Things looked bleak as we prepared ourselves to fall back on becoming another flat-fee monthly subscription platform.
Then, my co-founder Ethan, had a call with a mentor, Joe Callahan. Joe works alongside some very talented dev teams and has the ability to work with ideas that are on the border of innovative and impossible.
His next big idea was about to come our way.
He proposed that we use a model where customers pay as they perform actions within the Boost Editor.
We thought of something similar to this before, but now that Joe suggested it, we started to take it more seriously. Joe’s input was enough to convince us that we needed to start asking users about it.
We took the idea to Michael Brenner, one of our advisors and a content marketing influencer. Michael is has been in the trenches of content production and so his opinion exemplifies that of many users.
Michael returned our question with, “I see some negatives, but I think you’re on to something here.” In short, give it a shot.
Setting a Price
We needed to decide what would cause someone to be billed and how much money that action would cost. Our original pricing model was $99 per month for a team of 3 people and $39 per month for 1 user.
To understand how we should price an action, we asked users from the beta.
Our question was simple, “how many articles do you write and edit per month?” From here we split it into 2 subsets.
For the more casual users such as a solo marketer, we estimated 2–3 posts per month. For high usage, such as agencies, we estimated 30–60 posts per month.
We proposed two different prices per action, $.50 or $.75, but ended up sticking $.50. We assessed it would take a user three to five actions to fully edit a post. $.50 an action adds up to $1.50-$2.50 per article.For the more casual users this would add up to $10 per month at most. High end users would incur a cost of $80–$120 per month.
No Usage? No Charge :)
If a user performed no actions in a month, their bill would be $0 and their account would still exist as active. This $0 spending per month is very similar to the basic version of audible. Users can step away from paying at any time without having a formal cancellation process.
We hope this model works to ensure users have a Joyful and long lasting relationship with us.