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> But this assumes the thing does not offer greater value to you in return. In that case, why are you paying for that service at all? Its about making the cust

> But this assumes the thing does not offer greater value to you in return. In that case, why are you paying for that service at all? Its about making the customer feel good about using your product vs making them do a business calculation every time they use your product. If you sold me a compiler and charged me every time I ran it(assuming no other compilers exist for this use case), it would certainly create value for me. BUT, I would run the compiler as little as possible. I would invest in linters / develop one in house. I would put processes and tooling around the compiler so that we ran it as little as possible. Instead, if I paid a flat one-time/monthly fee for the compiler, I would get as much use out of it as possible. I would love that fact that I have a great tool at my disposal. I would evangelize it to my coworkers, since "we already paid for it".

Silhouette 6y ago
The problem with analogies is that by their nature they're rarely entirely realistic. Say there is a SAAS that provides CRM features used by customer support teams. If you're a user of that SAAS, maybe it's saving you 25% of the time you used to spent handling customer support enquiries with your previous software and process. That's clearly a win. If it's also priced per enquiry, but at much less than that 25% saving rate, using it is still clearly a win. Are you really going to invent whole other systems and processes to try to minimise how much you're using the one that you already have and that is demonstrably much better than what you had before? Are the front-line customer support staff whose time it is saving? IME, this kind of argument usually arises from a sense of fairness or feeling like you ought to be able to get a better deal with some other pricing model elsewhere. But in business, good management is logical and evidence-based, and that includes investing in good tools and improving processes if these offer a good RoI. Indeed, with that same logical, evidence-based approach to the management of the SAAS product itself, users who are going to be swayed by a negative emotional reaction to a pricing structure that objectively offers them good value for money may be more trouble than they're worth. If your pricing model sends them somewhere else then that may also be a win.
- dahfizz 6y ago
  > Are you really going to invent whole other systems and processes to try to minimise how much you're using the one that you already have... In this situation, there would likely arise a culture of "don't do extra queries". The people who can close a ticket in less queries gets to brag about cost savings at the next salary review, even if such a practice is detrimental. Its not about being stingy, its about the user experience. Even if it is the exact same $/month, charging upfront is a better experience and sets up better incentives than nickel and diming the customer throughout the month. I have gone through this exact thing with AWS. Where I work uses AWS, but the "pay as you go" model creates a sort of adversarial relationship. We have engineers creating tools that finds the cheapest instances given certain parameters. We have people spending time tuning configurations and build jobs to be as cheap as possible to run. Yes, it is worth it for the company to pay someone to 'optimize' our use of AWS. And that both lowers the amount of money AWS makes from us, but also makes AWS frustrating to use.
  - Silhouette 6y ago
    I was imagining a pricing model based on what you're calling tickets, so I'm not sure quite what your hypothetical culture would achieve, but I suspect we've misunderstood each other there. Also, please remember that AWS was exactly the example I gave originally of a pricing model that has a deterrent effect because it's so hard to understand.

Silhouette 6y ago

The problem with analogies is that by their nature they're rarely entirely realistic. Say there is a SAAS that provides CRM features used by customer support teams. If you're a user of that SAAS, maybe it's saving you 25% of the time you used to spent handling customer support enquiries with your previous software and process. That's clearly a win. If it's also priced per enquiry, but at much less than that 25% saving rate, using it is still clearly a win. Are you really going to invent whole other systems and processes to try to minimise how much you're using the one that you already have and that is demonstrably much better than what you had before? Are the front-line customer support staff whose time it is saving? IME, this kind of argument usually arises from a sense of fairness or feeling like you ought to be able to get a better deal with some other pricing model elsewhere. But in business, good management is logical and evidence-based, and that includes investing in good tools and improving processes if these offer a good RoI. Indeed, with that same logical, evidence-based approach to the management of the SAAS product itself, users who are going to be swayed by a negative emotional reaction to a pricing structure that objectively offers them good value for money may be more trouble than they're worth. If your pricing model sends them somewhere else then that may also be a win.

dahfizz 6y ago
> Are you really going to invent whole other systems and processes to try to minimise how much you're using the one that you already have... In this situation, there would likely arise a culture of "don't do extra queries". The people who can close a ticket in less queries gets to brag about cost savings at the next salary review, even if such a practice is detrimental. Its not about being stingy, its about the user experience. Even if it is the exact same $/month, charging upfront is a better experience and sets up better incentives than nickel and diming the customer throughout the month. I have gone through this exact thing with AWS. Where I work uses AWS, but the "pay as you go" model creates a sort of adversarial relationship. We have engineers creating tools that finds the cheapest instances given certain parameters. We have people spending time tuning configurations and build jobs to be as cheap as possible to run. Yes, it is worth it for the company to pay someone to 'optimize' our use of AWS. And that both lowers the amount of money AWS makes from us, but also makes AWS frustrating to use.
- Silhouette 6y ago
  I was imagining a pricing model based on what you're calling tickets, so I'm not sure quite what your hypothetical culture would achieve, but I suspect we've misunderstood each other there. Also, please remember that AWS was exactly the example I gave originally of a pricing model that has a deterrent effect because it's so hard to understand.