Optimal Pricing Strategy of SaaS Providers Charge by Usage

DOI

10.2991/aebmr.k.220405.338How to use a DOI?

Keywords

SaaS service; charge by usage; Free trial strategy

Abstract

This paper studies the renewal cost, discount rate and free trial time when SaaS providers provide free trial services, and discusses how these factors will affect the pricing strategy of SaaS providers by constructing a two-stage game model. This paper finds that before users perceive the real quality of SaaS services, The optimal profit increases with the increase of free trial time and user perception rate. When SaaS providers charge by usage, in any case, the hybrid price discrimination strategy cannot make SaaS providers achieve the optimal profit, and when the transaction cost increases, the user’s utility and SaaS service provider’s profit will also decrease. When the transaction cost is low, SaaS providers will adopt intertemporal price discrimination strategy. With the growth of transaction cost, the profit of behavior-based price discrimination strategy is higher than intertemporal price discrimination.

Copyright

© 2022 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article distributed under the CC BY-NC 4.0 license.

Download article (PDF)

TY  - CONF
AU  - Zhiyuan Zhang
AU  - Taofeng YE
PY  - 2022
DA  - 2022/04/29
TI  - Optimal Pricing Strategy of SaaS Providers Charge by Usage
BT  - Proceedings of the 2022 7th International Conference on Social Sciences and Economic Development (ICSSED 2022)
PB  - Atlantis Press
SP  - 2017
EP  - 2022
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.220405.338
DO  - 10.2991/aebmr.k.220405.338
ID  - Zhang2022
ER  -