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Profitable Billing Lessons from 19th-century Pony Express and DataDog
Find out what DataDog and Pony Express had in common and how they revolutionised their pricing for profitability.
Pony Express, the mail service in the 19th-century American West could deliver a letter across half the continent in just ten days. Speed was its hallmark, but so was its pricing strategy: you paid more for faster delivery and less for standard service.
Datadog is known for its cloud-scale monitoring and analytics, it charges based on the number of hosts you're monitoring. Simple enough, right? But hold your horses!
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Datadog knew that not all data is created equal. Some metrics are more critical and need to be monitored in real time, while others might not require such frequent checking. So, what did they do? They introduced different pricing tiers based on the granularity of data monitoring.
If you need real-time updates, you pay a premium. If you're okay with less frequent data pulls, you pay less.
By doing so, Datadog managed to serve both ends of the market spectrum. Smaller companies could afford the basic tier, while larger enterprises who needed more granular data could opt for the higher tiers.
This tiered, usage-based billing model maximized their market reach, much like how the Pony Express was accessible to anyone willing to pay for speed.
And here's a kicker: Datadog also offers a "Free Forever" tier for those who want to dip their toes into the data lake. This is akin to how the Pony Express would sometimes carry personal messages for soldiers free of charge, building goodwill and brand recognition.
From the dusty trails of the American West to the high-speed lanes of the internet, the essence of billing has remained the same: adaptability and a keen understanding of customer needs can take you a long way. Whether it's delivering letters across rugged terrains or crunching complex data sets, a flexible billing strategy can make you a legend in your field.
To be flexible with your business offering in today’s SaaS one should have a flexible billing system as well that can accommodate all business changes and improvements. That’s why we have Togai. It’s the most flexible billing software ever, and with the newest launch of entitlements, you can create new pricing tiers, experiment (multiple ones, really!!), and bundle them as your product and business needs scale.
Put your reading glasses on:
In this series on how to effectively bundle and price your offerings, are you puzzled about how to package and price your product right? Here are some reads that’ll answer your burning questions and help 2x your revenue:
1. How to monetize my APIs? - If you’re breaking your head to look at the monetizable features in your product with a fresh perspective, this is the one you should peer into!
2. Should I gate some of my features? - Well, as the saying goes, don’t reveal all your cards at once, feature gating helps create intrigue. If you’re thinking about whether to go all-in with your software features or keep some behind the velvet rope, this is the read that'll clear the fog.
3. What type of trial should I give? Long or short? - In the Game of SaaS, timing is the deal breaker. If you're torn between offering a sprint or a marathon trial, we hope this article will help you cross the finish line!
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What’s brewing with the product?
🚀 Recurring Entitlements & Credit Grant Rate Cards: Just like your favorite subscription box, Togai now supports recurring entitlements and credit grant rate cards, flexibility in billing is the name of the game.
📜 Proposal Power-ups: You can now send proposals from Togai to your potential customers. Businesses can not only create proposals but when your customers accept them, a purchase flow is created automatically on Togai! Super easy right?
🔀 Clone & Collaborate: Clone price plans in a jiffy. We've got multi-user support with customizable roles and permissions. Collaboration is now made easy!
🔌 Integration Galore: We've been busy shaking hands digitally with some of the big players out there. Welcome on board: Paystack for seamless African transactions, Docusign for crucial e-signatures, Quickbooks for the accountants in the house, and Victoria metrics & Prometheus for the data enthusiasts. And here's the cherry on top: our conditional workflow step execution. Configure use cases with ease—like invoicing US clients via Stripe, delighting African customers with Paystack, or reaching out to Indian patrons through RazorPay.
Want to explore more of what Togai can do? Get a Walkthrough Today!
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