Do you offer metered pricing? Some observations...
I don't run a service that does metered pricing, but I purchase from several places that do...
- VPS providers like Digital Ocean / Linode / AWS
- Twilio
- Etc...
A few days ago, I was looking for a text-to-speech API service and found a really great one. I must've spent 20-30+ minutes on their landing page, imagining all the use cases I had. Their product was really superb -- really a few times better than what Azure offers.
I ended up going with Azure, and couldn't really put my finger on why. At first, I convinced myself it was the pricing.
But in reality, I felt uncomfortable leaving my credit card on file with a smaller company with basically an uncapped spending limit.
Their UI didn't allow a way for me to "top-up" my credit, or to alert me to my spending (via email or some other means) when it's above a certain amount.
I feel these are sort of the barriers (read: objections) that can happen for those pay-as-you-go services. Anyway, my 2 cents. 😊
Makes sense, although the billing type the service offers and how they charge you is completely independent. Just because you "signed up" for subscription, doesn't mean that smaller company won't just "accidentally" charge you more.
In the end, it is really just marketing. What's more important is that the unit/value for your product matches what your users are expecting.
For instance in Authress we use metered billing. It is important to us that small startups and other indie hackers can get security automatically without needing to commit to something much larger. When you are still validating an idea it should be easy to get off the ground. Having to commit to $$$ doesn't make sense.
However, we make sure that reasonable circuit-breakers are in place. Specifically we have different buckets you can limit your account, and have an automated solution which allows you to request "more api calls".
This gives you the best of both worlds.
Our marketing is focused around getting what you need and scaling with you, and our tech provides the functionality that it works. And if anything goes wrong of course there is our world-class support (it is one of things we pride ourselves on).
It sounds like the product you were using, didn't give you the trust or confidence in what they were providing that you would secure in your usage. That's exactly what you should be evaluating, and the pricing is just one aspect.
This comment was deleted 3 years ago
It was actually really difficult. We needed to investigate what the unit/value cost way for managing a service such as this. After a long history for our team of working with a bunch of companies that all tried to write their own authentication/authorization (so many mistakes made), we had some good starting ideas about cost to run over time (TOC).
We know most of our users ended up having a dedicated team for this. Then it was just a matter of breaking down the costs associated with the team and understand which parts of that we actually provide value for.
The unit value, wasn't number of users for their products however, since some users can cause a high amount of cost, so we don't charge by user. A lot of companies are spending $1M USD a year supporting the technology with a fully functioning team, if they want to do it right. Sure there are lot's of ways to bring that down (and we expected many Indie Hackers will never hit that number). So what was reasonable?
It was clear what is important became: what does our market look like?
We found out there are a couple of segments, with vastly different usage and necessary layers to support their products. We picked the segment we felt we had the most to offer and modeled it (spoiler alert: Indie Hackers). As such we adjusted for the types of usage in that segment and our expectation of team sizes, attention to security, growth potential, etc...
The result was a table of calls/usage/users/costs. We expect X calls per day/per user in Y scenario and compared that to standard spend to get that functionality based from our research. Then we cut that number down even further, since it was too high for us.
Another aspect is hidden numbers, we believe everyone should pay for what they need. Why would using more usage cause us to charge less? Our pricing is meaningful, there is no hidden up charge. You get a large number of free calls to start, then pay a fixed easy price based on scale that matches your unit value. Our "higher" plans, offer additional features, like priority support, but it is always $0.0011 per call.
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If you have further questions and want to chat, I'm always available: wparad@rhosys.ch
This comment was deleted 3 years ago