As part of Abio’s transition to a Software as a Service (SaaS) company, we needed to develop a consistent, transparent, and fair pricing model that could work for clients of all sizes.
The pricing challenge we ran into was that Abio is not just a single service but many interconnected services housed in a single platform. These services complement one another; for instance, when you use Abio to generate and send out estimates, your estimate automatically generates the budget for the job, which avoids errors and saves you time.
We want to encourage our clients to use all of our features so that rules out some common SaaS pricing models, such as a) dividing services into tiers and then charging to add extra functionality or b) setting a fixed price for all clients.
We had to decide what kinds of usage clients should pay for. We wanted to avoid nickel-and-diming clients by charging per service and at the same time we wanted to get a fair price for our product.
The solution we came up with was to create an Abio service package and charge each client for the number of packages they use in a month. The service package sets a fixed number of unique users (the people actually entering information into Abio), workers on payroll, pay cheques, quotes, etc. all for a set cost.
With that decided, we needed to work out what each package should contain and how much that set cost should be.
We had to do some market research for this – if we charged more than competing services, we’d have trouble finding clients. If we charged too little, we’d have trouble staying in business.
We found that most construction enterprise software providers do not show their prices on their websites. We learned that “transparent” pricing is not standard in this industry, and many companies instead negotiate a price with each new client.
The one competing product that openly advertises its price is Payworks, which provides construction payroll only. Many construction companies pay for enterprise software, then they export their payroll data to a paid service like Payworks in order to send out all the pay cheques. Abio provides all these services in one package.
So based our research and knowing what current and former clients have paid for enterprise software, we calculated a fair market value of our services. We looked typical client requirements (employees, pay cheques) to create a package that would both meet the requirements of a small business and be scalable to meet the needs of a large construction firm.
What we ultimately came up with a monthly charge of CA$99 per package that would include:
- Access for 1 Abio desktop user
- 8 employees
- 40 pay cheques per month