Marketing automation has become an essential part of any successful business’s marketing strategies. It helps streamline and automate repetitive tasks, increase efficiency, and drive revenue growth. There are several marketing automation tools available in the market, each with its pricing model, but the two most common approaches are per user and per feature.
Per User Pricing Model
The per-user pricing model is based on charging a fee for every user that accesses the marketing automation software. This model is favored by vendors who want to make their tools accessible to small businesses with few team members or solo entrepreneurs. You can explore Drip pricing options to check whether it meets your needs.
Advantages:
- Predictable Costs: The per-user pricing model suits companies that need consistency in budgeting as this method brings a fixed cost structure. You can easily see what your monthly/yearly bill will be without worrying about unpredictable costs such as usage restrictions or peak hours.
- Scalability: Per-User billing allows you to add users rapidly without increasing your total contract value significantly. Therefore, you will never have to pay inflated fees for extra capabilities you may not even use.
Disadvantages:
- Limited Features: Vendors providing per-user billing usually offer standard/basic features, limiting scalability and usage further down the line when more complex workflows are required. This allows for greater customer segmentations and engagement opportunities via email campaigns or social media integrations.
- Higher Total Cost: When your number of users increases over time, it’ll lead to increased costs overall. Paying more than necessary for additional capacity requirements that aren’t getting used can cause unnecessary even by just having the access rights alone!
Per Feature Pricing Model
Under this approach, vendors charge by individual features used within their platform, such as email campaigns, social media integration, or A/B testing. This allows each business/user flexibility in their consumption of services without bogging them down with expenses they don’t require at that stage. However, they will still have access if their needs evolve over time.
Advantages:
- Customizable And Flexible Package Selections: With the feature-based pricing model, companies can choose only to pay for the functionality they need at that specific time. This results in a potentially lower cost of entry than if they opt for per-user pricing – particularly when their needs are small or at startup stages, for which the granular costings offered via this method are perfect.
- Increased Functionality: Companies who utilize the per-feature model often invest in more varied offerings as business opportunities evolve or adapt accordingly. This leads to increases in revenue streams with fewer out-of-pocket expenses since adoption scales alongside usage rates. Their custom package designability is a huge advantage over all-inclusive membership rates being charged, and the pro-rated monthly payment setup under per-user billing models further helps achieve greater efficiencies overall.
Disadvantages:
- Cost Complexity: Feature-based packages may necessitate businesses to perform calculations on anticipated usage, making it easier to overlook potential overcharges for unnecessary additional extras that offer minimal benefits. Consequently, a lack of insight into projected future usage could lead to unexpectedly higher bills if contracted allowances are exceeded. Without consistent evaluation, costs may surpass estimates, affecting mid-month and yearly budgets and potentially yielding long-term ramifications.
- Fluctuating Costs Based On Needs: While feature selection offers flexibility based on needs and preferences, the total bill fluctuates due to variable factors like increased clicks and impressions resulting from seasonal workloads. This contrasts with traditional flat fee models that are charged over fixed periods without accounting for variations.
In Summary
The decision between Per User and Per Feature Pricing Models hinges largely on your specific business requirements and how you wish to receive your marketing automation software, taking into consideration any budget limitations outlined by your accounting team’s guidelines. Do you lean towards straightforward billing based on staff numbers, or does a more detailed approach tailored to organizational or departmental structures suit your needs better? The chosen option should ideally maximize efficiencies and drive business revenue by selecting the most suitable software service for your respective projects.
