How do you handle limits in your SaaS plans?

It depends on the product and the cost your business incurs in the case of overage.

I personally like the approach of soft limits. Keep track of the amount of times a customer has exceeded their limit and by how much. After a certain threshold give them a nudge to upgrade to a more suitable plan for their business.

The last thing you want to do is get in the way of a customer using your product, even in excess.

It depends on the feature, if it's something that's easy to automate and upsell, for example, for Produktly if you have capped your product tours, and try to create another one you will be redirected to the billing page and a message displays that prompts you to upgrade.

I think soft limits are also fine, especially at the start and for things that might be harder to automate. It also feels like a better experience, because it doesn't really matter if someone slightly exceeds their plan once or twice.

Never auto upgrade or charge overage fees - a great way to piss off a user. We notify approaching their monthly limit and then once they hit the limit with options to upgrade.

Charge overage fees is not very friendly I think, and it may cause churn. I think add-on or upgrade is a good idea. Take our product airgram.io for example, when users reach the limit, we may inform them and let them keep using for once, then they need to upgrade.

I actually conducted a survey on this on Twitter: https://twitter.com/robertbalazsi/status/1439221015004000262

People seem to have varying opinions. :)

Ensure limits are high enough so that they would not be reached, short of abuse :)

Think of how MacOS approached this, in contrast to Windows - there are no Home, Pro, or Ultimate MacOS editions with different price, there is just one full-featured OS that gives the best possible experience to every user.

This is, of course, not always possible in a SaaS. It is often possible, however, to get rid of artificial limits, behind which there are no actual cost increases for the SaaS.

We sell plan with page-views as limit. We just auto charge when only 4000 page-views left in the account.

We run an email marketing tool and there is basically only 1 plan and users get all features. The only difference is the number of subscribers they can have in their plan.

When a user goes over their subscribers limit, we auto bump up to the next tier, and also charge overage fees at the end of the billing cycle on the month they exceed their limit.

Having a FAQ that explains this on the bottom of your pricing table/page is useful.

I’m working a new SaaS and we plan to go with soft limits.

We’ll let the customer know that they passed the threshold and will kindly ask them to upgrade.

It’s not very costly for us if they exceed the limit so I feel the best service would be being lenient.

As been said before here, it really depends on your business model and how business critical the service is for the customer.

Communication needs to be clear up front, maybe even ask your customers what they want: cut me off when "credits" are gone or just upgrade to next tier.

And if the overages don't cost you much, you could allow incidental x % overages

Hey Jordan, I think it depends on how you tier your pricing plans.
Here's an approach we took -- https://www.avoma.com/blog/saas-pricing

What worked best for me is to notify them via email a bit early. So if there's a usage charge that you have set up, then tell them a week early or a couple of days before it expires. In 70% of scenarios, they will be aware of it and will take some action.

And for the rest who either missed the message or aren't taking any action, you can simply block their service use until they rectify the issue or get in touch with you, or upgrade. And send them an email saying "your service use is on hold, to continue please click here to top-up or upgrade".

For Pirsch (https://pirsch.io) we run a batch every night and count the page views. Should the user pass the limit, he will be notified and requests will be blocked in five days. This ensures the user can upgrade the plan if desired, or just wait for the billing cycle to end and the limit is reset. There is also a configurable notification when a certain percentage of the limit has been reached.

My main SaaS auto-upgrades since we charge per unit per month and the unit in our business is fairly static and only ever increased by the client, knowingly.
In that case they know they increased it and expect a proportional increase in fees.

If we had banded tiers with usage limits based on clients own users activity then this approach may not be suitable. Wouldn't want my bill to double because of a few extra clicks I wasn't aware of.

We generally show a notification and send a mail a few times a month but do not put hard limits unless the feature also costs us.
Some do upgrade and some just ignore the messages but any ways we do not block users.

We notify customers that they are nearing their ceiling, along with an opportunity to upgrade to the next plan. The thing you DON'T want to do is auto-upgrade. That's a straight path to pissed off customers.