Baird HallOne price, whatever the size of the customer.
Most pricing pages ask the buyer to pick a plan, count seats, or estimate usage. Flat-rate pricing asks for none of that. There is one price, and it buys everything.
That simplicity is the appeal, and also the main risk.
What is flat-rate pricing?
Flat-rate pricing charges a single fixed fee for full access to a product, usually per month or per year. Every customer pays the same, and everyone gets the same features. There are no tiers to compare and no usage meter to watch.
A handful of software companies run it on purpose.
Caps its price at a flat $299 a month for unlimited users, however large the account grows.
37signals prices its email app at a flat $99 a year, with no per-seat charge.
Sells one plan at about $20 a month, every feature included, built for one kind of user.
Why flat-rate pricing works
A single price is easy to understand and easy to sell. The buyer knows the cost in one glance, with nothing to calculate and no surprise on the invoice. For a focused product with one type of customer, that clarity can be a real advantage.
Basecamp built its whole model on it. It caps the price for everyone, no matter how large the account grows, and its founders treat that as a feature.
The most you can basically pay us is $299 a month, and we'd be happy to have your business at that level.
His co-founder David Heinemeier Hansson frames the same choice around the small customer. Per-seat pricing would charge the biggest accounts the most, and Basecamp chose to give that revenue up.
Where flat-rate pricing breaks down
One price has to serve everyone, and most markets are not that uniform. Two problems follow.
A budget buyer sees no cheaper way in and leaves for a competitor with a starter plan. At the other end, a large customer gets far more value than they pay for, and can lean on your servers and support without ever paying more. Basecamp felt this itself. By 2022 a thousand-person company was paying the same flat fee as a five-person startup, which caps how much revenue any single customer can ever bring.
That ceiling is why many subscription businesses move off flat-rate. Netflix launched streaming in 2011 at one price of $7.99 a month, then split into Basic, Standard, and Premium tiers in 2013. Spotify started with a single $9.99 Premium plan in 2014 and later added Duo, Family, and Student tiers.
Each new tier let them charge more for premium features and open a cheaper door for budget buyers. A flat price captures neither, so a customer who grows never pays you more.
Netflix
Spotify
Flat-rate pricing vs tiered pricing
| Flat-rate | Tiered | |
|---|---|---|
| Plans | One | Several |
| Easiest to | Understand and sell | Match to each buyer |
| Expansion revenue | None | Grows with the account |
| Best for | Focused product, one buyer type | A range of customer sizes |
For a full breakdown of the alternative, see the guide to tiered pricing.
Keeping customers when you only have one plan
Flat-rate leaves you without a cheaper plan to fall back on. When a customer finds the price too high, it is pay in full or leave. Churnkey gives you a way to save that customer, and tells you when one price is costing you.
Offer a save when there is no cheaper tier
When a customer on your one plan hits cancel, Cancel Flows can offer a pause or a targeted discount to keep them. It gives you the save mechanism a single plan does not have on its own.
A pause or a targeted offer at cancel, even when you have only one plan to sell.
Let Adaptive Offers size the save
Adaptive Offers tests different offers and depths and learns the smallest one that keeps each customer, so a save on your flat price gives away as little as possible.
Adaptive Offers tests offers and learns the one that keeps each customer.
See when one price is costing you customers
Cancellation Insights tags how many customers leave over price. When that number climbs, it is your signal that a single price no longer serves your whole market, and a second plan may be due.
When price becomes the top reason for leaving, it may be time for a second plan.
One price keeps things simple. Keeping customers on it is how the model pays off.
FAQ
What is flat-rate pricing?
Flat-rate pricing charges a single fixed fee for full access to a product, usually per month or per year. Every customer pays the same and gets the same features, with no tiers and no usage meter.
What is an example of flat-rate pricing?
Basecamp caps its price at a flat rate for unlimited users, 37signals sells its email app HEY for a flat $99 a year, and Sunsama offers one plan with all features for about $20 a month.
What is the difference between flat-rate and tiered pricing?
Flat-rate has one plan at one price. Tiered pricing has several plans at different prices, so it can match each buyer and grow revenue as an account expands. Flat-rate is simpler; tiered captures more expansion revenue.
Is flat-rate pricing good for SaaS?
It works for a focused product with one type of customer, where simplicity is worth more than expansion revenue. For a range of customer sizes, tiered or usage-based pricing usually captures more value.