The easy guide to integration pricing and packaging

You won’t find a SaaS product that doesn’t pride itself on its integrations to some degree.

The issue ariseswhen organizations struggle to price and package their integrations. This guide aims to help you turn that issue into a common practice for your SaaS product.

We’ll cover the following topics:

• An overview of integration pricing and packaging as a practice
• Benefits of pricing and packaging your integrations accordingly
• Common types of integration pricing models
• A step-by-step guide to implementing integration pricing and packaging
• A quick-fire round of closing tips and best practices

Let’s get started.

What is integration pricing and packaging?

Integration pricing and packaging is the practice of structuring and pricing your SaaS product to support integrations with other software solutions. It's about deciding how integrations fit into your product offering and how much customers should pay for them.

Think of it as building a house. Your core product is the house, and the integrations are the different rooms or extensions.

So, why should you care about integration pricing and packaging?

Because integrations are exceptionally valuable. They can attract new customers, reduce churn, and even unlock entirely new use cases for your product. They're not just add-ons – they're a core part of the modern SaaS experience.

In short, SaaS companies need integrations that play nicely with the modern tech stack.

Let's get a bit more specific with some examples:

• API integrations: These allow your SaaS product to communicate with other software through a set of rules and protocols. For example, a CRM's API integration might allow it to automatically pull in lead data from your marketing automation platform.
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• Third-party software connections: These are pre-built connections to popular software tools. Imagine a project management tool that integrates with Slack. It lets you receive notifications and updates directly in your team's communication channels.
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• Custom integrations: A customer might need a specific integration that's not available off the shelf. Custom integrations are tailored to the customer's unique needs and can be a powerful way to differentiate your product.

What are the benefits of integration pricing and packaging?

Now, let's dive into the concrete benefits of this practice:

You amplify your product’s appeal

Integrations are essentially about expanding the capabilities of your SaaS product. This can make it more enticing to potential customers.

When your product integrates with popular tools and platforms, it shows versatility. As a result, potential users are more likely to consider your solution. This added functionality can even justify a higher price point. Customers will understand that more integrations equals a more valuable investment.

You keep customers happy

A well-designed integration strategy enhances the overall user experience. This is because you’re helping users connect different tools and automate tasks. Most importantly, integrations eliminate manual data entry, reduce friction, and simplify workflows.

Integrations that are packaged and priced correctly will delight customers. They’ll see that your integrated pricing and the cost of using your SaaS are justified. This should be a sign that you’re packaging integrations in pricing tiers that make sense.

You stand out from the crowd

In the competitive SaaS landscape, differentiation is key. Integrations can be your unique selling proposition, setting your product apart from competitors.

You should strive to offer unique integrations tailored to specific industries or use cases. This will give customers a compelling reason to choose your product over others.

You fuel revenue growth

Integrations are about more than just enhancing the customer experience. They also present lucrative revenue opportunities. You can monetize your integrations in several ways, such as:

• Bundled integrations: Package integrations together with your core product or other features. This lets you offer comprehensive solutions at different price points.
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• Tiered integrations: Offer different levels of integration access based on subscription tiers. This incentivizes customers to upgrade for more advanced integrations.
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• Pay-per-integration: Charge customers a fee for each integration they use. This gives them the chance to pick and choose the integrations they need.
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• Freemium integrations: Offer a limited set of basic integrations for free. This will likely entice users to upgrade to premium integrations.

Types of integration-pricing models

Now that we understand the why behind integration pricing and packaging, let's dive into the how. We’ve just mentioned some of them. Now, let's explore them in detail:

Bundled integrations

Integrations are woven into your core product offering, often at a premium price point. This model presents your product as a complete solution. It shows your SaaS solution encompasses crucial integrations from the get-go.

Pros

• Simplicity: Customers don't need to navigate a complex menu of add-ons or face unexpected costs.
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• Enhanced value perception: Bundling integrations elevates your product's perceived value. It positions it as a more complete and robust solution to justify a higher price.

Cons

• Higher base price: The cost of integrations is factored into the overall price. This could deter price-conscious buyers.
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• Potential for underutilization: Some customers may not fully use all bundled integrations, which can lead to a feeling that they’re overpaying for the product.

Tiered integrations

Integrations are strategically distributed across different service tiers. As customers upgrade to higher-priced plans, you grant them access to more refined integrations.

Pros

• Adaptability: Customers can select the tier that aligns with their budget and integration needs.
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• Upselling potential: This model creates a natural incentive for customers to upgrade. By doing so, they gain access to more advanced or specialized integrations.

Cons

• Complexity: Managing multiple tiers with varying integration access can be intricate. This could confuse your team and customers.
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• Feature gaps: Customers on lower tiers might feel limited by the absence of key integrations. This could make them very frustrated, so bear this in mind.

Pay-per-integration

Each integration is treated as a distinct product with its own price tag, which grants customers granular control over their integration expenses.

Pros

• Transparent cost structure: Customers have complete transparency regarding the cost of each integration. This is great for customers who are very precise with their budgeting.
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• Pay-as-you-go flexibility: This model lets customers pay only for the integrations they actively use, helping them eliminate unnecessary expenses.

Cons

• May discourage adoption: The individual pricing model could deter customers from experimenting with multiple integrations due to cost concerns. As a result, they can become less likely to try new integration features.

Freemium integrations

Freemium integrations are a strategic blend of complementary and premium offerings. Basic integrations are offered as an enticing freebie, while more advanced integrations are reserved for paying customers.

Pros

• Attracts a broader user base: The allure of free integrations can draw in a wide audience. In the best-case scenario, you're converting some into paying customers.
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• Potential for conversion: As users experience the value of basic integrations, they may be enticed to upgrade.

Cons

• Low conversion rates: A significant portion of free users might never transition to paid plans, which limits this model's revenue potential.
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• Resource-intensive: Supporting a free tier can demand considerable resources. Especially if you offer customer support or regular updates for free integrations.

A step-by-step guide to pricing and packaging your integrations

Ready to monetize those valuable integrations? Let's break down the process into manageable steps:

1. Identify key integrations

Start by understanding what your customers truly need. Conduct surveys and interviews or analyze support tickets to pinpoint the integrations that will make the most significant impact.

Remember to keep an eye on the market. What integrations are your competitors offering? Which platforms are trending in your target industry? Aligning with market demand ensures you're not just meeting but exceeding customer expectations.

2. Determine your pricing strategy

This step requires a balanced approach. Begin with a thorough cost analysis: How much did it cost to develop each integration? What are the ongoing maintenance expenses?

Next, assess the value proposition. Does the integration save time or boost revenue for your customers? Quantify this value. Finally, peek at your competitors' pricing models for insights. Do remember to differentiate yourself based on your unique value proposition.

3. Develop the actual packages

Think of this as crafting the perfect menu for your customers. Consider creating tiered offerings, where each tier includes progressively more advanced integrations.

Explore bundling popular integrations together for a convenient, value-packed option. And remember those with unique needs. You’ll want to offer the flexibility of custom integration packages to cater to specific requests. Keep in mind anything custom will likely be more costly.

4. Communicate clearly with customers

Transparency is key to building trust. Communicate the benefits and costs of each integration package. Be upfront about what's included, limitations, and additional fees. Ensure clear documentation is available to guide customers through setup and troubleshooting.

Remember robust customer support to address any integration-related questions or concerns. Remember, clear communication fosters a positive customer experience and encourages integration adoption.

Tips for a more effective integration pricing and packaging

Now that you know how to price and package your integrations, let’s dive deeper. We’ll explore some implementation best practices for your SaaS product:

Keep your customers front and center

Happy customers are the heart of any successful business. When designing your integration offerings, focus on how each integration enhances their experience.

Does it solve a pain point? Does it unlock new possibilities? Make sure that each integration matches what your target customers are looking for. That’s what being customer-centric is about.

Offer a variety of options

Your customers may be at different stages in their enterprise journeys and, as a result, have different needs. Some might be just starting out, while others are established enterprises with complex needs. Cater to this diversity by offering a range of pricing and packaging options.

Think about creating tiered plans with different levels of integration access. You can also offer bundled packages for popular integrations for a specific user group. As always, consider custom integrations if they apply to your SaaS product.

Embrace change and adapt

The tech world and your customers' needs are constantly evolving. Regularly review your integration offerings based on feedback and emerging trends. Perhaps a specific type of integration is growing in popularity.

You might have to weigh out different pricing models and package structures. The key is to stay nimble and adapt when it makes sense. You’ll want to keep your eyes peeled as groundbreaking tech is seemingly always around the corner.

Make billing a breeze

Confusing invoices are key ingredients in a recipe for customer churn. Make sure your billing process for integrations is transparent and easy to understand. Communicate each integration's cost, usage limitations, and additional fees.

Consider offering a user-friendly dashboard. Ideally, the interface lets customers manage their integrations and track their spending effortlessly. If that proves too costly and cumbersome, you’ll want to consider using a dedicated billing platform.

Next steps

After reading our guide, you’ll see that integrations of pricing and packing aren’t the end of the line. The next crucial step is to ensure that you’re accurately charging customers who use them.

However, managing your team's bandwidth to focus on billing can be a challenge, especially with complex usage-based or hybrid models. Thankfully, you don't have to tackle this alone.

A specialized billing platform like Orb can take over. This will allow you to focus on your core product and free up resources that could be better used elsewhere.

Orb is purpose-built to meet the unique billing needs of SaaS businesses. It integrates SaaS pricing best practices so you can delegate billing to experts on the matter.

Here's how Orb can solve SaaS billing for you:

• Effortless billing: Orb handles the intricate details of usage tracking, calculations, and invoicing. Remember that not all customers will be using integrations. To avoid mistakes, you’ll want to be as granular as possible with your billing.
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• Adaptable pricing: With Orb, you can easily create and modify pricing tiers, discounts, and usage-based metrics. This empowers you to respond swiftly to market shifts and customer feedback.
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• Smooth integration: Orb integrates with your existing tools and workflows and sits atop your data warehouse. This means Orb is always pulling accurate information. The result is that customers won’t find discrepancies in their invoices.

Learn how Orb can help you establish a hassle-free consumption-based billing model.