Published June 5th, 2024, Motiff insights

Motiff fair price policy

Helay Zhang
Helay Zhang
Product Manager
Ryan Zhang
Ryan Zhang

We've written a blog post to share our thoughts on Motiff's pricing strategy, where we see pricing as part of the value a product offers to its users. When it comes to setting a billing policy after pricing is determined, we follow one simple principle:

Consider what is "fair" from the users' perspective.

In exploring the vast landscape of SaaS pricing models, two questions stood at the forefront:

  1. 1.Should users get compensated when purchased seats decrease or remain unused?
  2. 2.How should the billing adjust when there’s a need to upgrade for added seats?

Question 1: Compensation for Decreased or Unused Seats

  • Workforce reductions in corporations and teams are common, and often, some users only need “temporary access.” If the payment is made annually, should there be compensation or refund when the number of seats decreases?
  • Businesses around the world have different purchasing habits for SaaS. Some teams prefer annual payments for budget planning and anticipate the need to add team members during the year. However, isn't it a waste to pay for more seats upfront than are used?

From the perspective of "fair pricing," if some purchased seats remain "inactive," should a SaaS continue to charge for these unused services?

First, the fees for unused or inactive account days can be calculated clearly. This transparency is one of the advantages of SaaS.

The remaining question is, even if the cost can be calculated accurately, should it still be charged?

After discovering Slack's model of "only charging for activated accounts," we are convinced that this should also be Motiff's approach. We believe that by consistently providing good products to our users, this policy will also lead to longer-term choices for Motiff.

At Motiff, we calculate the amount corresponding to your team's "inactive" seats within the year, and this amount is returned as credits to your account. These credits can be used to offset 100% of your next payment and are valid for one year. This way, teams using Motiff won't lose out on purchasing extra seats, and in the event of a team downsizing, can use these credits as payment value for next billing cycle.

Question 2:From seat upgrades to bill increases

Upgrades for new members to obtain "Designer seats" (for editing design files) or "Developer seats" (to use the Dev Mode) can occur in two ways:

  • The member informs the administrator, who then upgrades the account;
  • It often starts with “needing to edit a certain document.” When an upgrade is needed, the member initiates a request.

In reality, few members are upgraded through the first method; most undergo the second. This aligns well with the nature of collaboration-focused SaaS.

Our research into similar SaaS models revealed two typical mechanisms for billing increases:

  1. 1.Plan A: Members upgrade immediately without approval, directly affecting the bill, though administrators can later remove “unnecessary upgrades” after reviewing the bill.
  2. 2.Plan B: Upgrades require administrator approval before being applied to the bill. Otherwise, the person cannot participate in the collaboration.

These two plans are distinctly different, but many SaaS products support both, allowing businesses to choose according to their preference. We analyze the advantages and disadvantages of both:

Returning to our simple principle of “considering what’s fair” from a user’s perspective, we contemplate what users might deem “unfair”:

  1. 1.Tedious reconciliation. Administrators dread seeing many “unknown” names on the bill, requiring checking with various department heads, which is cumbersome for large organizations.
  2. 2."Stealthy changes" to the bill. Some SaaS products adopting "automatic upgrades added directly to the bill" seem generous: allowing administrators to remove newly added users during the billing cycle, essentially providing free access. However, our research and interviews suggest that many teams forget to reconcile accounts (not all have dedicated administrators), leading to unnoticed bill increases. This generosity ironically pressures administrators with the burden of accurate reconciliation to avoid financial losses for the company.
  3. 3.Approval processes hindering collaboration. Imagine the frustration when an urgent project needs immediate additional member involvement, but everyone is waiting on an administrator’s approval.

Considering these "undesired" scenarios, we found neither of the initial approaches addressed all three concerns. Thus, we developed and refined two “improved” plans:

  1. 1."Improved" Plan A: Members can confirm on their own to gain access after self-upgrading and immediately receive upgraded features. Administrators are notified and requested to process it within a deadline.
    • If unprocessed by the deadline, members are automatically upgraded, and it's added to the bill.
    • If administrators disagree before the deadline, it won't be added to the bill.
  2. 2."Improved" Plan B: Similar as "Improved" Plan A, but default action differs if administrators don’t respond by the deadline.
    1. a.If unprocessed, the member isn’t upgraded, thus not affecting the bill.
    2. b.With administrator approval, the member is upgraded and added to the bill.

The two "improved" plans mentioned above have similarities in their logical implementation, but the fundamental difference is that if the administrator does not take action, one will automatically upgrade, while the other will not.

Motiff chose the "improved" Plan B as our default. It directly resolves the three "undesired" user concerns we outlined earlier, which are:

  1. 1.Members can instantly upgrade for collaboration without waiting for approval.
  2. 2.If administrators don’t act by the deadline, no unwanted upgrades occur, preventing unexpected bill increases.
  3. 3.Administrators avoid the shock of unexpected bill items, facilitating a smoother approval process.

Motiff also offers the "improved" Plan A as an option for teams preferring a more flexible management style. Teams looking for flexibility in permissions and billing management can use this setting to reduce administrative costs.

At the same time, Motiff also offers the "improved" Plan A as a preference setting available for teams. If some teams prefer a more flexible approach to member permissions and billing management, they can use this setting to lower administrative costs.

We continuously consider what is "fair" from the user's perspective in our billing policy at Motiff and welcome feedback and suggestions from our users to improve further.

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