Consider the per active user pricing as an alternative to the per user pricing model. With this approach, customers pay for the individuals who actively use the product. This resolves the concern of your customers about purchasing more seats than necessary.

Other SaaS pricing models to look into:

- Tiered pricing
- Flat rate pricing
- Usage based pricing
- Per user pricing
- Freemium pricing
- Feature-based pricing

What’s the per active user pricing model?

Per active user pricing models are becoming increasingly popular among businesses looking to offer more flexible payment options to their subscribers. With this model, businesses only charge users based on their level of activity, ensuring that teams are not wasting money on empty or inactive accounts. 

👉 Also read: What is SaaS Magic Number?

This means that businesses can enroll as many users as they need, without worrying about having to pay for vacant accounts. This pricing strategy is ideal for growing businesses with fluctuating subscriber levels, as it allows them to adjust their expenses accordingly. Overall, per active user pricing is a balanced approach that benefits both businesses and users.

The per active user pricing model in action

Slack is a cloud-based instant messaging platform that facilitates effective collaboration among individuals within an organization. They are renowned for their unique pricing model, which charges users based on active product usage. This approach ensures fairness and aligns with their commitment to providing value to their customers.

Advantages of the per active user pricing model

• Customers can avoid wasting money on inactive users.
• Enterprise companies find it simpler to implement your product across the entire organization, as they only incur costs if it delivers results. This approach ensures optimal decision-making for customers, allowing them to maximize value while minimizing risk.

👉 Also read: What’s a good retention rate for SaaS companies?

Drawbacks of the per active user pricing model

• It may not be well-suited for small businesses as it lacks sufficient incentives when working with smaller teams.
• Comparing it to per-user pricing, the complexity increases, particularly in the definition of an 'active user'.
• Annual price plans may not align seamlessly with this service, as customers may view it as wasteful if they do not use it frequently.

Unlocking the perfect pricing model for your business can be overwhelming amidst the sea of choices. However, relying on competitor strategies or generic advice won't cut it. Tailoring a unique pricing model is crucial, with external resources serving as a helpful reference, not a definitive solution.

👉 Also read: How to reduce SaaS churn?

Who is per-active-user pricing a good fit for?

If you've been facing challenges persuading customers to adopt your per-user model, consider transitioning to the per-active user pricing model which offers lower risk. This shift may encourage them to make the leap and embrace your offering.

Recommended reading:
The guide to SaaS content marketing
How to do SaaS SEO the right way

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