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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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This article expands on a question originally shared by Realistic_Office7034 on Reddit — enhanced with additional analysis and frameworks.
When you've built a credit-based SaaS product and have your first paying customers, it's tempting to lock users into subscription plans to create more predictable revenue. But is forcing subscriptions the right move, or could it actually hurt your growth?
For early-stage SaaS companies, especially those with usage-based or credit-based models, finding the right balance between flexibility and recurring revenue is critical. The short answer? Making subscriptions mandatory for credit top-ups often creates unnecessary friction that can deter paying customers.
The Early Traction Reality Check
A 4.7% conversion rate (7 paying customers from 150 accounts) is actually promising for an early-stage SaaS. This signals there's product-market fit worth nurturing, not restricting.
At this stage, your primary focus should be on:
- Understanding what drives these paying customers to convert
- Reducing friction in the purchasing journey
- Maximizing lifetime value through enhanced value perception
Forcing subscriptions introduces a barrier precisely at the moment when users are showing purchasing intent—the exact opposite of what early-stage products typically need.
Why Mandatory Subscriptions Can Backfire
When users are already willing to pay for credit top-ups, adding subscription requirements creates several potential problems:
Increased Purchase Friction
For users who prefer occasional purchases, mandatory subscriptions create a psychological barrier. They may be perfectly willing to spend $20 on credits every few months, but hesitant to commit to a $10/month recurring charge—even if the latter is technically cheaper over time.
Data from B2B SaaS purchasing behavior shows that decision fatigue increases dramatically when moving from one-time purchases to recurring commitments, with approval chains often lengthening by 60-80%.
Misaligned Value Perception
Credit-based systems typically signal "pay for what you use" to customers. Mandatory subscriptions contradict this fundamental value proposition, creating cognitive dissonance for users.
Customer Segment Blindness
Different user segments have different needs. Small businesses or freelancers might prefer pay-as-you-go flexibility, while enterprise users often prefer the predictability of subscriptions. Forcing one model eliminates the other segment unnecessarily.
The Incentive-Based Alternative
Instead of restricting options, create clear incentives that make subscriptions obviously more attractive than one-time purchases. Analysis of pricing transitions across SaaS companies shows three effective approaches:
1. Value-Based Subscription Benefits
Make subscription plans offer 20-30% more credits per dollar compared to one-time purchases. For example:
- One-time purchase: $50 for 100 credits
- Subscription: $50/month for 130 credits
2. Feature Differentiation
Reserve certain features exclusively for subscribers:
- Priority rendering/processing
- Advanced customization options
- Premium templates or assets
- Better analytics
3. Rollover Hybrid Model
Create a hybrid model that offers the benefits of subscriptions with the flexibility of credits:
- Monthly commitment ($X/month)
- Credits roll over month-to-month (no "use it or lose it" pressure)
- Potentially cap rollover at 3-6 months to maintain predictable usage patterns
This approach provides the predictable revenue of subscriptions while still feeling fair and flexible to customers.
How to Implement a Dual-Path Strategy
Based on successful implementations across B2B SaaS companies, here's a strategic framework for balancing one-time purchases with subscription options:
Step 1: Segment Your Current Users
Analyze your 7 paying customers and remaining 143 accounts:
- How frequently do paying customers top up?
- What's their average purchase amount?
- Are there usage patterns that suggest subscription potential?
Step 2: Design Tiered Subscription Options
Create 2-3 subscription tiers that provide clear value advantages:
- Basic: Slightly better value than one-time credits (15-20% more)
- Pro: Significantly better value (25-30% more) + 1-2 exclusive features
- Team/Business: Volume discounts + all exclusive features
Step 3: Maintain Flexible Purchasing Options
Keep one-time credit purchases available but position subscriptions as the "smart choice" through visual cues, comparison tables, and savings calculators.
Step 4: Implement Automated Suggestions
Add intelligence to your platform that suggests subscriptions when user behavior indicates it would be beneficial:
- "You've topped up 3 times this month. A Basic subscription would save you 20%."
- "Your team is using 250+ credits monthly. Our Team plan would include priority support and save you $X annually."
Measuring Success Beyond Revenue
When evaluating this dual-path approach, look beyond immediate revenue to:
- Lifetime Value (LTV): Do subscribers stay longer and spend more over time?
- Purchase Frequency: How often do non-subscribers return to buy?
- Expansion Revenue: Do subscribers upgrade tiers more readily than one-time purchasers?
- User Satisfaction: Do NPS scores differ between subscription and à la carte users?
Industry benchmarks suggest that well-designed dual-path systems can increase overall LTV by 35-45% compared to subscription-only models, particularly for products with variable usage patterns.
When Mandatory Subscriptions Make Sense
There are specific scenarios where mandatory subscriptions might be appropriate:
- Your product requires ongoing maintenance costs regardless of usage
- Your target market explicitly prefers predictable billing (e.g., enterprise)
- Your value proposition includes time-sensitive content or updates
Even in these cases, offering annual prepay options with significant discounts can address many of the same concerns without the month-to-month commitment barrier.
Conclusion: Optimize for Long-Term Growth
For an early-stage SaaS generating UGC-style ad videos, with just 7 paying customers out of 150 accounts, forcing subscriptions is likely premature. Instead, focus on designing subscription incentives that make monthly commitments clearly advantageous while maintaining flexibility.
The most successful credit-based SaaS products don't force users into subscriptions—they make subscriptions so obviously beneficial that users choose them voluntarily. By creating clear value differentiation, you transform subscriptions from a restriction into a reward, driving higher conversion rates and customer satisfaction simultaneously.
Remember that at the early stage, removing purchase friction and understanding user behavior should take priority over forcing specific monetization structures. The goal is to grow your base of happy, paying customers—however they prefer to pay.