Advantages of a Monthly Pricing Model

Advantages of a Monthly Pricing Model

You may have heard the term SaaS thrown around a lot. Even if you haven’t, you’re probably using it. Do you store files in Dropbox? Watch movies with Netflix? Listen to music on Spotify? These are all SaaS products. SaaS stands for Software as a Service.

Wikipedia defines SaaS as a software licensing and delivery model in which the software is licensed on a subscription basis and is centrally hosted.

What do you think it would cost to rent every movie you’ve watched on Netflix? Or to buy every song you’ve listened to on Spotify? Thousands of dollars? I know that’s what it would cost me. The SaaS model allows a service provider to charge a low monthly fee to a lot of customers to drive the price down. It’s changing the way we do business online. Just look at a basic cost breakdown by a custom website agency we found by doing a simple Google search.

Custom website cost breakdown

$16,000 – $30,000! Consider that you’ll probably need a new website ever three years if you want to stay current with design and SEO trends.

Let’s look at another example. The folks over at The Executionists did a nice article on the cost of new websites as well as website redesigns for small and mid-sized companies. The following is their breakdown:

Website cost breakdown by Execusionist

Again we’re into the $10,000 and up range! Chances are you aren’t getting any feature upgrades with that either. You’ll pay for those. Wouldn’t you rather break that down into lower monthly costs and get continued upgrades?

5 advantages of SaaS

1. Server & Hosting
Websites on a SaaS model are hosted in a shared environment. Each customer is chipping in a small amount for a server and hosting. Contrast this with each customer paying for their own and you can see where the savings come in. And with the arrival of cloud solutions like Amazon Web Services (the same Amazon that offers 2-day shipping), the cost and time to scale out additional servers is minuscule. They’ve given programmers access to the same infrastructure they uses to host their own online shopping website.

2. Design

SaaS websites use a similar layout and design for each customer. However, you can configure it to match your company branding. You can add a logo, tagline, colors and all of your content to give it a unique look. You have the added advantage of getting a design that has been vetted, tested, and run through its paces by all of the other customers on the platform. Our designs are clean, modern and look beautiful on every device. Best of all, they don’t look like they were designed 10 years ago.

3. Maintenance & Support
Deploying a bug fix for one person fixes it for everybody, immediately. You may not even know the bug existed, but another customer found it and it gets resolved. This results in a more stable website without any effort on your end. Contrast this with a custom solution where you find every bug, you report it, and you wait for the fix. This can be a real headache.

4. Setup Time
Getting a website off the ground with a SaaS model takes very little time. It could happen the instant you sign up, or it could take a couple days for the provider to get things configured. Compare that to a custom website where you have to deploy everything to a new server, and that takes a considerable amount of time.

5. Features & Upgrades
Feature enhancements and upgrades come included with a monthly pricing model. One customer may request an improvement that is good for everybody. That update gets sent out to everybody. That’s a significant advantage of SaaS. One man’s need makes the product better for everybody.

We love the idea of a community of home builders working together, with us and with each other, to help make a product better. That’s why we chose to use SaaS for the Builder Built platform.

-Author