Simplifying SaaS pricing with a credit system

ChatDaddy had a few different plans, and over time we had also added things like extra seats, extra channels, and other paid add-ons.

It worked, but the pricing had become hard to explain and hard to manage. Some plans also included unlimited messaging, which had started costing us a lot after years of usage.

I was originally meant to redesign the pricing page, but the more I looked at it, the more I felt the problem was not the page. The pricing itself had become too complicated.

I suggested moving to a credit system instead.

The basic idea was simple: customers would buy credits, and different things inside the product would use those credits. They could also buy extra credits when they needed them, instead of moving to a bigger plan just for a short period.

This worked especially well for WhatsApp because usage was not always the same every month. During busy seasons, some customers would send a lot more messages. With credits, they could just buy more for that period.

We spent the next few months rebuilding the billing system around this.

It also made things easier on the operations side. Instead of managing lots of separate Stripe items and checking if every add-on was being billed correctly, we had a much simpler system to work with.

The new pricing led to:

• $57K in extra one-time payments, up 107% YoY
• Subscription renewal revenue growing from $326K to $670K
• Average deal size going from $1,377 to $2,350

The system was not perfect. It still took some work to explain the change to older customers, and I think we could have made the credit model even simpler.

Still, it solved a lot of the billing and pricing problems we had at the time, and made it much easier to add new paid features later.