What is Per-User Pricing?

The per-user pricing strategy charges a fee for each customer who requires access to a SaaS product. This is a transparent method through which the billing value scales together with the number of customers using the software.

Although per-user and pear-seat are frequently substituted for one another, there are some technical distinctions between the two. 

Per-user pricing is the of charging associated with a specific set of login credentials or a named account. On the other hand, with pricing per seat, several users can use the same license in succession. 

It’s relevant to mention that the advantages and disadvantages of per-seat and per-user monetization strategies are comparable. 

For one thing, using this pricing strategy, both clients and SaaS can determine different costs. Also, by taking into account how many consumers have paid for a product, this pricing strategy helps in calculating future revenue.

Not only that, but this billing mechanism can make businesses push employees to use the product more. 

On the other hand, though, per-user pricing may not be an appropriate option for software developed for enterprises and with regular users. 

Examples of SaaS companies using the per-user billing mechanism: 

• Asana: This project management and organization tool combines freemium with per-user pricing, offering customer several paid tiers to choose from. 
• Slack: The same as Asana, this collaboration tool mixes freemium, tiered pricing and per-user billing, presenting a balanced monetization offer to multiple customer segments. 

Per-user billing can be a suitable alternative for SaaS services that offer value to the majority of employees within the same company. Your offering should be regarded as a required service for the business in question. 

Additionally, small and medium-sized organizations are appropriate candidates for this monetization model, as the costs of using the service are controlled. 

If regular users who are part of larger enterprises are your target market and could drive more license demand, you might want to think about switching your monetization technique to per-user pricing.

Additionally, using the per-seat pricing strategy can be a suitable choice if you wish to offer discounts based on volume.

 The following factors should be taken into account while switching to this model:

•  Your competitors: Are they billing by the seat?
•  User opinions: What is value delivery understood by your customers?
• Anticipated revenue: Is there room for company scalability with this price model?