What I love about the online landscape are the unlimited amounts of genius ingenuity and specification towards business needs. As the business format moves from the old corporate classic model to a new hybrid of small business opportunities running in with the whales, I find that more and more brilliant tailored services are rising.
Testing and personal adaptation have simply become a rule of thumb.
Licensario is one of those companies that understands this change and offers a service that might revolutionize the perception of billing and pricing models.
As a grand lover of direct, personalized approaches, I requested a short interview with Gil Sadis Co-Founder & CEO of Licensario.
The Results are of course, below:
My name is Gil Sadis and I’m the Co-Founder & CEO of Licensario. Before Licensario I was a software engineer at Conduit where I met my partner Igor Shapiro. We both are SaaS addicts 🙂 and we realized that SaaS companies are doing basically the same when it comes to their pricing. They split their software to features and package them into 3-4 tiers of pricing. And in order to price the software they look at their competitors websites or doing cost plus. We started investigating the SaaS pricing world and got to the notion that SaaS companies are dealing with their pricing too little. They want to make more changes but usually they are limited as their developers are busy with fixing bugs and implementing new features. This is what we wanted to change. We wanted to give the pricing power of a large enterprise to every company in the world. So we developed Licensario – a cloud based solution that provides software companies the ability to test, learn and change anything that’s related to their pricing and packaging without changing a single line of code. This gives them the ability to optimize their pricing and helps them increase conversions and maximize revenues.
What billing challenges are software providers facing in today’s market? Have these challenges changed over the past 5 years?
With the advancement and the introduction of new technologies these challenges changed a lot. A few years ago opening a merchant account was a nightmare. Today you can just register to Stripe and start accepting payments almost immediately. The challenges shifted from payments issues to business management issues. Today, accepting payments is not enough for SaaS businesses. Billing is a part of a chain that consists of management, finance, marketing, product and development. The new era in billing, are billing systems that understand that their role is not just invoicing customers automatically.
Another important thing to note is that 5 years ago, SaaS was not as popular as it is today. SaaS and cloud computing introduced new pricing models such as subscription and usage based payments. And these models, in return, introduce new challenges such as churn, renewals, metered billing and more.
Also, the number of users increased because SaaS is being utilized in B2C software as well like Evernote and Dropbox. It means more market segments and one of the challenges is to cover most of these segments with the right pricing offering and billing capabilities.
The last challenge I want to talk about is agility. Today, the name of the game is agile. Development becomes agile, product management becomes agile and so should the billing system. Creating such billing infrastructure, that will allow companies to react fast to every market change is not an easy task. Companies want their billing system to be highly flexible and blend exactly to their needs. And they don’t want to pay big bucks for that or spend months on integration.
Customizable billing can remarkably increase companies abilities to test, track and increase their ROI what kinds of new developments are you forecasting in the near future?
As SaaS adoption continues to grow rapidly, I’m expecting to see more of the following:
• New pricing models – Subscription will still be the most common one but I expect to see more companies introduce other models like pay-as-you-go which is not that common now due to technical issues. But with the flourishing of new and agile billing companies like Licensario, pay-as-you-go, which was a model used mainly by large enterprises, is commoditized.
Other than that, technology will allow companies (that couldn’t so far) to create hybrid plans that include a few different pricing models like subscription and pay-as-you-go when subscription limits are exceeded.
• Marketplaces – We’ll see more and more companies that will open their platforms by publishing an API so that 3rd party developers will add content to their platform in the form of addons, extensions, plugins and so on. The business model will be revshare
• Targeted pricing – We call it that way but it can also be called customized, personalized or value based pricing. What it means is that SaaS companies will be able to segment their users by different parameters (like usage, location, gender etc.) and offer each segment a pricing plan that suppose to capture its exact needs from the software. This can be perfect for companies that use the freemium model but not just. It can also be used for users in trial or to upsell paying users. This will help companies cover more market segments and convert users that fall between the conventional 3 tier pricing offers.
How can Saas companies increase their market awareness using Licensario?
Licensario is not a marketing tool per se, though used with love by marketers who use it for a/b tests and for creating new offers. But I would like to point out two features that can increase market awareness:
The ability to offer different plans and packages to different segments.
The ability to bundle features from one SaaS product with another SaaS product (Co-Marketing) creates another distribution channel for companies and thus increases market awareness.
What in your opinion are the key factors that will determine a company’s successful billing efforts?
The market changes vigorously and one of the most important parts that helps companies compete better is a top notch billing and pricing infrastructure. Great pricing infrastructure will contribute to higher conversion rates and lower churn rates.
I assembled a short questionnaire that can help companies assess their infrastructure:
• Time to market with new offerings – How fast can you introduce new plans and packages?
• Promotions – How fast can you offer a promotion that contains a slightly different version of your pricing page? i.e. giving access to a lightweight version of your software for a limited period for $x.
• How easy it is for you to up/cross sell?
• How easy it is for you to test your packaging and pricing?
• How automated is your billing process?
• Can you accept payments in most of your target markets?
• Can you easily offer discounts for higher commitment periods?
• How easy it is for you to introduce new pricing models?
• Do you have the means to analyze your revenue from users’ activity perspective and find the correlation between users’ activity and revenue?
These questions put more focus on different issues than payment issues because most of the systems out there will allow companies to process credit cards. But as I mentioned, the world has changed and challenges changed. If a company can answer positively to most of these questions then this company is ready to compete.
If you had only one marketing tip for new Saas startups, what would it be?
Marketing is math. You don’t want marketers that only write content and generate likes/tweets. You want the ones that understand SaaS metrics, how to measure them and how to improve them.
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