Pricing is obviously a complicated issue, and I know there will never be a "right" or "wrong" way to price a product. I guess all I can say is that I don't agree that plan-based pricing is good for the consumer. One of my main objections is that I don't agree that plan-based pricing is easy/simple.
Take a look at Highrise: http://highrisehq.com/signup
37signals seems to have set the standard for plan-based pricing pages, so I think this is a good example to use. Right off the bat it's complicated because I to choose which plan I want before signing up. How in the hell do I know how many deals I need? Then I have to constantly monitor usage to make sure Idon't pass the invisible threshold. Uh oh, one of my employees added one contact and my price just doubled. That's the opposite of simplicity.
Now let's look at a more recent 37Signals pricing page: http://basecamp.com/pricing
This is still plan-based, but it's much closer to being a la carte based on the number of projects used. I can't speak for 37Signals, but it would seem as if they don't think that the plan page they popularized is actually the best approach.
Things can definitely get too complicated if the units you measure with a la carte become too granular (like charging per byte of storage or something crazy like that), but there's normally a nice middle ground. Basecamp made # of projects the metric to focus on. My company charges per user and makes everything else unlimited which generally makes the cost scale linearly with usage (roughly) but it's still very simple and predictable so no one has to spend time checking the invoice.
My company is called "Less Annoying CRM" so we naturally attract people who are sensitive to the annoying shenanigans that are common with other companies, and this is one of the biggest things my customers tell me they like about our service. The pricing has a huge impact on the customer experience which is largely ignored in this blog post. (Note: I realize there is selection bias with my anecdotal evidence, so you can say I don't have the complete picture, although I think after 2.5 years of talking to potential customers every day, I've got a decent idea)
In addition to all of that, it seems clear to me that the purpose of plan-based pricing is to get the majority of your customers to pay more than they should by only allowing them to buy more resources than they need. This is obviously true with cable subscriptions and cell phone plans, and I think it's equally true with SaaS apps. This is even more apparent when you read blog posts like this one and understand how much thought goes into designing a pricing structure that extracts every penny possible from each and every customer.
If you want to make more money, then ok, but I don't buy the claim that this is in the customer's best interest.
Take a look at Highrise: http://highrisehq.com/signup 37signals seems to have set the standard for plan-based pricing pages, so I think this is a good example to use. Right off the bat it's complicated because I to choose which plan I want before signing up. How in the hell do I know how many deals I need? Then I have to constantly monitor usage to make sure Idon't pass the invisible threshold. Uh oh, one of my employees added one contact and my price just doubled. That's the opposite of simplicity.
Now let's look at a more recent 37Signals pricing page: http://basecamp.com/pricing This is still plan-based, but it's much closer to being a la carte based on the number of projects used. I can't speak for 37Signals, but it would seem as if they don't think that the plan page they popularized is actually the best approach.
Things can definitely get too complicated if the units you measure with a la carte become too granular (like charging per byte of storage or something crazy like that), but there's normally a nice middle ground. Basecamp made # of projects the metric to focus on. My company charges per user and makes everything else unlimited which generally makes the cost scale linearly with usage (roughly) but it's still very simple and predictable so no one has to spend time checking the invoice.
My company is called "Less Annoying CRM" so we naturally attract people who are sensitive to the annoying shenanigans that are common with other companies, and this is one of the biggest things my customers tell me they like about our service. The pricing has a huge impact on the customer experience which is largely ignored in this blog post. (Note: I realize there is selection bias with my anecdotal evidence, so you can say I don't have the complete picture, although I think after 2.5 years of talking to potential customers every day, I've got a decent idea)
In addition to all of that, it seems clear to me that the purpose of plan-based pricing is to get the majority of your customers to pay more than they should by only allowing them to buy more resources than they need. This is obviously true with cable subscriptions and cell phone plans, and I think it's equally true with SaaS apps. This is even more apparent when you read blog posts like this one and understand how much thought goes into designing a pricing structure that extracts every penny possible from each and every customer.
If you want to make more money, then ok, but I don't buy the claim that this is in the customer's best interest.