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Ask HN: Is Cost per Call (CPC) a Reasonable Way of Pricing for a REST SASS?

3 points by typedweb ↗ HN
I'm developing a web service and have the idea of implementing charging for the service using a Cost Per Call (CPC) method, having the customer keep a monetary balance with the service to continue using it. Does this seem like a reasonable way of charging customers, or would they be more happy with a tiered (based on usage) monthly subscription model? Pluses and minuses of either pricing model would be greatly appreciated.

7 comments

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saluki
I think most customers would prefer to know that this is going to cost me $99/month till I hit a certain level of XYZ and that you will contact them when they approach that level to move up to the next plan.

Plus for your benefit I think you'll make more money off the tiered plan (depending on the service you are offering).

While everyone wants highly engaged customers who are getting maximum value out of your service I think you could have months where a user just doesn't log in to view their data that often, it's still there, still providing value but they might only login and review once per month.

Are you going to charge them $99/view?

On the flip side you might have users who login 4 times per day so they are both getting value but costs would be very low vs. very high.

I think tiered plans work better.

Take this feedback with a grain of salt as it may depend on your service/offering.

But for most SaaS I'd rather see as tiered as both a user and the owner of the SaaS app.

typedweb
The system I'm developing is a message passing system, so I've looked mostly at PubNub's pricing model to get the idea for a tiered system. Mine is going to be a lot smaller at the start and it's only me running it so I'm looking at the least hassle and maintenance for collecting fees.
brianwawok
So what are the competitors?

A really simple message passing system is http://aws.amazon.com/sqs/pricing/

first million free, then 50 cents per million after that. I suspect you will do something fancier and cost more...

Personally when I look at services like this, I look for 2 things.

1) Free tier. Not time based, but volume based. If some prototype takes me 3 months to write, I don't want to run out of a free demo 2 weeks in.

2) Does pricing scale in a sane way? Or does it go free... free... free... $5,000 a month! If I see an insane price scale, I will also avoid something. I always price something vs doing it myself.. and for a smaller app, I could never afford 5k so why even mess with the product.

typedweb
Thanks for the info. I've done some research on competitors and I'm trying to find the correct pricing vs my costs for the system. This is my first web service so I'm really just trying to figure out all the details on something simple that I haven't seen provided yet and go from there. Hopefully some people will find it useful, but I realize I have to keep my pricing in check but my costs in balance.
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jtfairbank
CPC doesn't model your customers cost / revenues well. They'll want to tie the software cost to a person or business cost or revenue, such as $50 per seat, or $1 per customer they have.
juanuys
I'll be looking at pricing too soon for my business, which has to do with processing PDFs. I'm thinking N cents per PDF, or N dollars per month unlimited.

I've set an HNWatcher [1] for anything pricing related (which is how I found this post), so I'm really just trying to learn as much as I can right now.

[1] https://www.hnwatcher.com/