We use 10+ different SaaS applications at ClinchPad. Since our product is also a SaaS application, I’ve been paying great attention to the factors that cause me to pick one SaaS product over another. It turns out one of the most important things is the pricing plans.

Generally, you offer something to a prospect for free so that they get hooked on to it and start using it. This concept of offering a teaser is prevalent occurs all industries (ice cream parlors allowing you a taste for example) and in the SaaS vertical manifests itself most commonly either as a limited time trial or a freemium. So most SaaS applications pick one of the two.

However, more SaaS applications should also consider a usage limited trial. This basically means picking a really low usage limit, such as Dropbox putting a disk space limit of 100MB. It wouldn’t really work for Dropbox for obvious reasons but depending on what your SaaS application does, it might just work for you.

For example, our product ClinchPad is a sales CRM. Most other CRMs either have a limited time trial or a freemium plan with up to X seats being free. ClinchPad on the other hand is free up to 100 leads. This allows the following advantages

• It looks like a freemium offering but it actually isn’t. Ultimately one day you’ll run out of leads and will be asked to make a monetary commitment.
• You ask the users to make a monetary commitment when they are highly engaged.
• You allow the users to check out the application at their own pace.

An example of where having a usage based trial worked is when I was choosing an analytics provider for ClinchPad. KISSmetrics was my first choice, I had already read several helpful articles on their blog and the reviews around the Internet where good.

However, they have really short 14 day trial period and their minimum pricing plan is $149/month. That is a little too much when you’re a bootstrapped startup doing a private alpha with 10 users. Mixpanel on the other hand is free up to 25,000 events which was quickly exhausted once we started gaining traction but allowed use it for four months for free while we were developing it (vs. paying KISSmetrics $600 which was more than all our other expenses combined).

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I’m Cheenu Madan, the guy behind ClinchPad. I’m getting started on Twitter, follow me at @cheenumadan