Never use a fixed fee plan (with your online backup pricing)
Using fixed pricing is the easiest way to lose money on Online Backups. Your storage, bandwidth, and support costs scale with the amount of data and number of machines your customer is backing up, so don’t sell yourself short by agreeing to a fixed fee plan.
Instead offer a reasonable cost based on the number of GB’s being stored on your servers, or the amount selected on the customer’s machine. Both these metrics can be easily found in your management dashboard.
Most of our resellers usually reside in the pricing ranges below
Online backup pricing using The Range Pricing Model
Online backup pricing using The License Pricing Model
This kind of pricing not only gives you solid profit margins (depending on your infrastructure costs) but allows you to increase the revenue based on consumption. This leads us to the second tip
Online backup pricing using Tiered Pricing Model
Now that you’ve established your per GB and/or per Machine retail pricing, make sure you build a simple matrix of tiers based on blocks of data. Here’s a good example:
Notice how the first tier creates a minimum charge of $20 per month no matter how small the customer is? This is critical so you never have unprofitable backup accounts that bring in silly numbers like $4 per month. You lose money and waste time. Always establish a minimum charge so every single backup customer you sign up makes you money.
One of the best features of tiered pricing is it allows you to offer a “lower” per GB rate, while still maintaining margins. For example, a customer sees they can backup up to 100GB for just $50 a month (50 cents per GB), but the reality is they will end up somewhere in the middle of the tier, generating $0.67 per GB in revenue or more.
Lastly, pricing in tiers makes monthly billing much simpler, as you don’t have to adjust a customer’s invoice just because their data grew or shrunk a few GB. Simple pricing equals less work for you.
Use a single price for everything – Don’t Upsell…
Customers prefer to pay a single price that covers the entire solution and can be very resistant to being nickel and dimed for add-ons, support, or even restoring data. Using this kind of pricing strategy increases attrition in our experience, as well as resources needed to deal with the complexity of the sales cycle.
Instead just focus on a reasonable value that includes: