Split the Check, Not the Blame
If you don't drink, you don't want to split the bar tab evenly with the table. So why do so many SaaS companies split their cloud costs evenly across every customer?
Sometimes we just make it too complicated. At least that's my perspective. I'm part of a younger generation (granted, the younger part is slowly slipping away), so I like keeping things simple.
Confused about your cloud costs, how to manage them, or how to set the right prices for your customers? Think about a bar. If you don't drink, think about a restaurant instead. More drinks, more cost. No argument when the bill comes. (Think AI. If you really dig into it, shouldn't you pay more if you use it constantly than someone who barely touches it?)
If you order the top shelf brand, you expect to pay more than if you order the entry-level pour. (Think fast, premium storage versus slower, cheaper storage.)
Same with food. Unless you go to an all-you-can-eat place. But I'll bet you don't often hear people rave about the food or the service there. SaaS companies should care about the quality of their product and service too, not just the price.
And if I go to a restaurant with friends, I always ask for separate checks. I don't like splitting the bill evenly. You're either subsidizing your friend's splurge, or they're subsidizing yours.
How would you feel if the server handed you the bill and said, "Sorry, I don't know what each of you ordered, so I can't split it"? Incredulous, probably. They have the information right at their fingertips. It might be hard for a server to reconstruct if they scribbled the order down haphazardly. If that's the case, tell the manager to get the servers better order forms.
So what's so hard about SaaS companies keeping it this simple? Turns out a lot of them are like that overwhelmed server. Customer-specific information just isn't tracked. Who ordered "extra AI on the side"? Who asked to "make it fast, I'm in a hurry"? Who took forever to process their order (the menu)?
Just decide to measure usage and price based on it. That way, no customer is quietly subsidizing another. You'll be able to see whether a customer is paying its own way. And you'll finally be able to have a real conversation with your team once you know the individual numbers, not just the total.
How do you actually do this? Read "Why Flat Pricing Is Running Out of Road" for the deeper dive, or just reach out to Beakpoint. As Nike says, "Just do it."
