Ask HN: Anyone using 'good guy' SaaS pricing?

Are you using it, and if not, why not?

By 'good guy' SaaS pricing I'm referring to not charging for your monthly-billed service if the user hasn't been active/logged-in/etc during the last billing cycle.

I just received an email from Slack saying they credited my account for a user that appeared "inactive" this month. Love that stuff. Great way to endear yourselves to your users.

If you're against the practice, I'd love to hear why. And if you're for the practice, let's recognize some of the good actors that have implemented it. Unfortunately Slack is the only one I can think of at the moment (Sprintly used to, but no longer).

7 comments

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shortsightedsid 12y ago ↗

I don't think it is a question of good guy or not, rather it's about honoring the contract. The moment you sign up for something you are entering a contract to pay. It's your obligation to do so. Now the other side can choose not to enforce that, but that doesn't make them a "good guy".

E.g. If you rented out an apartment but stayed at friend's place for a month, then is the landlord going to skip asking for rent for that month? No. Does that make him a bad guy? No. It's your responsibility to pay for rent. Same thing applies to car loans/leases/rentals, Newspaper subscriptions and Gym memberships. So, why should SaaS pricing be different? Granted an app can easily figure out if you haven't used their system that month, but then so could a gym.

chadkruse 12y ago ↗

I think rent is a good analogy, particularly for mission-critical apps (as Sprintly was for me at the time).

Looking at non-mission-critical apps like Gliffy though, I only really wanted to enter a contract for one-month's worth (actually, just one diagram's worth), but I didn't have the option. I didn't want an apartment, I wanted a hotel room. After paying for the empty apartment for too long, I realized I wasn't getting my money's worth and bailed. Next time I needed a diagram tool, I chose a different hotel (LucidCharts), and they got a few months rent from me when I needed an extended stay. I'd probably still be using Gliffy if they offered a hotel room option.

Now that the rent analogy is beat to death...

biggerfisch 12y ago ↗

I think a flaw of the rent analogy is the same one as in comparing the (illegal) downloading of movies/music/etc to stealing the physical medium. In the physical space, when one rents or buys something, the seller has less product available at that time and the impact of theft is much more noticeable whereas online, if a user signs up but never hits the servers, they uses no resources at all (except maybe a few rows in a database).

That said, I agree that contracts should be honored and paid - even when not used.

palidanx 12y ago ↗

I had a situation where a client signed up for my companies's saas service, then cancelled 2 days later without generating any of the artifacts they needed. When they cancelled, I didn't get any complaints or messages from the client.

I followed up with a phone call, and learned that they had to use lab analysis and couldn't use our service. I credited them the one month subscription they subscribed to since they didn't use it. They appreciated the gesture, and hopefully they can generate some leads for their friends.

noahc 12y ago ↗

If you sell to businesses, this is a horrible idea. I'd rather you charge me $150/month and have no one use the service than have to explain to my boss, "Why are we paying $110 this month, when it was $70 last month and two guys no longer work for us?"

Also, customers are paying for the option to use your software at any time without signing up again. You're providing some amount of value just in holding their data on your system. You shouldn't avoid capturing that value.

chc 12y ago ↗

This is largely why I'm not a big fan. I'd rather have predictable charges than "Eh, we'll just charge you whenever because we're nice guys."

orky56 12y ago ↗

While we're on the general topic of 'good guy' SaaS pricing, I thought I would bring up Asana. They charge MORE per head as your team gets larger. Their logic is that if you are a small team/startup you are strapped for cash whereas if you are larger, you should be more able to afford it. Once again, another example of 'good guy' pricing being more confusing and misrepresenting value.