Not tested them both: I work with annual billing for my SaaS. The pricing page shows monthly prices, which works well for me. Customers buy a contract for a year which they can cancel at any moment. Obviously the remaining months within that contract year will not be refunded. Note that the SaaS is only 300 euros a year so your mileage may vary. (B2B market)
Annual billing works for my model because my users will not be making enough frequent purchases to justify a monthly fee (which is what I initially started with). I provide actionable information which they can use once, twice or more times a year.
We offer both, about 20% subscribe to annual plan.
It's pretty common for SaaS to offer a monthly plan and an annual plan for each tier that is 10 x Monthly cost so users get 2 months free paying annually.
Not always. Personally, I find annual billing a bit annoying to deal with because it introduces spikiness into our monthly revenue numbers. Whereas before I could tell you roughly what we'd bring in each month (by looking at the previous month and adding a bit), now it can vary by a few thousand dollars depending on where our Annual subscribers land in the year.
In the long term, it's probably better for the business, since it bumps Lifetime Value up a bit for those customers. But I'd actually prefer it if nobody took advantage of it, so that I could have a nice smooth revenue chart to look at.
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[ 0.25 ms ] story [ 40.5 ms ] threadIt's pretty common for SaaS to offer a monthly plan and an annual plan for each tier that is 10 x Monthly cost so users get 2 months free paying annually.
In the long term, it's probably better for the business, since it bumps Lifetime Value up a bit for those customers. But I'd actually prefer it if nobody took advantage of it, so that I could have a nice smooth revenue chart to look at.
We do non-recurring monthly and recurring annual as a in-between solution.