In a post earlier this month, I raised the issue that SaaS vendors targeting small businesses need to start experimenting with different pricing options if they want to create a true volume market for their solutions (Prescription for Subscription Fatigue? Time for New SaaS Pricing Models). While per user, per month pricing has become the norm in the SaaS world, monthly fees can add up quickly for small businesses–and at a certain point, individuals and decision makers in small businesses balk at forking out for another subscription.
Last week, Tate Holt, CEO of Workingpoint (http://www.workingpoint.com) gave me a briefing and demo on their solution. In case you’re not familiar with Workingpoint, the company was previously called Netbooks, but they have scrapped that name, along with the old Netbooks product. Workingpoint is built on new code and sports a much cleaner, easier to use UI than it’s predecessor. The solution provides small businesses with a business management solution that includes accounting, contact management, expense tracking, dashboard and reporting–along with some other neat things, such as a profile page to create a one-page starter Web site to get indexed on the Web.
Workingpoint has come up with a new twist on SaaS pricing that is worth taking a look at. The vendor’s strategy is to offer small businesses “a compelling free product without a time limit with compelling reasons to upgrade”. The first user subscription is free “forever”.
This in itself isn’t that unique; several vendors offer a free seat or two. However, Workingpoint charges one flat fee that covers both additional users and premium services–kind of like a buffet. For $10 per month, you can register as many additional users as you need. So whether you add 1 user, or 5 more, you’re covered with that one, $10 per month charge. In addition, the flat $10 per month fee will also give the small business access to use many of Workingpoint’s planned premium features, such as banking integration, Web store integration, and mapping service for Schedule C Level tax reporting.
To make this business model work, Workingpoint needs to convert about 25 percent of its users to the paid model. After formally launching the solution in July, the company has taken it’s first baby steps towards this goal, signing up its first paying customers this month. It will be very interesting to monitor Workingpoint’s progress and see if it can make this alternative pricing model work–both for small businesses, and for itself.