Pricing Strategies: #2 Plan your Service Offerings using Plans

Meet Harvey & Mia, hailing from the same Tech school, carrying the dream of setting up their own IT maintenance firm in their location. They drew up a clear business plan and put their business in motion on New Year's Eve. They had great reception right from the beginning. Harvey was a little concerned about investing in a back-office solution and decided to work with basic tools for customer management, invoicing, and reporting.

Whereas Mia, even though she had a similar start to Harvey, liked to experiment and get into solid back office solutions upfront. Months went by, and the customer base grew to nearly a thousand.

"Another month, another batch of invoices.. "

That's what Harvey sighed every time he sat down to prepare billing for his IT maintenance clients. Every month looked the same: scan last month's invoice, tweak a few numbers, re-check the values, send again. But as his business grew, so did the inconsistencies. Some clients increased their usage, some reduced it, and some added new devices in the mid-month. Yet, his recurring invoices didn't reflect these nuances unless he manually intervened.

Meanwhile, his friend Mia seemed to scale effortlessly. Her billing wasn't tired of recurring invoices at all. She used subscription plans. Instead of repeating invoices, she packaged her offerings into structured plans that made sense to her customers. She presented multiple plans, each with a clear scope, usage allowance, and pricing model. Customers subscribed, upgraded, downgraded or extended without requiring Mia to rebuild or recalculate an invoice. Her billing ran on autopilot most of the time, while Harvey found himself buried in month-end edits.

This contrast highlights the importance of being ready for the shift, especially if you are offering services. Recurring invoices keep generating revenue, but subscription plans build businesses and help you strategise your sales.

Subscription Plans Vs Recurring Invoices 

Recurring invoices repeat a charge. They don't really understand usage, limits, upgrades, downgrades or changes in the billing cycle. In contrast, Plans in Zoho Billing is designed to inherit usage, limits, and amendments, and to provide room for scaling.

Recurring Invoices	Subscription Plans
Every billing cycle needs manual oversight.	Billing is automated based on a predefined frequency.
Pricing adjustments require editing the template.	Pricing is structured by tiers or units.
Usage changes are tracked separately.	Upgrades and downgrades are seamless and prorated.
Customers have little clarity on what's included and what's not.	Customers understand precisely what they're paying for.
Scaling takes lots of admin effort.	Scaling becomes operationally effortless.

 

Tips: If you deliver services regularly, you can experiment by productising your services into plans rather than billing them as recurring invoices. It simplifies billing and strengthens your offerings.

Plans: The Foundation of Subscription-Based Billing 

A subscription plan is more than a price bracket. It's a packaged version of your ongoing services. It defines,

• What does the customer receive?

• How often are they billed?

• Does the usage limit apply?

• How do pricing changes as they scale?

 It transforms your service into a structured offering your customers can choose from, compare and grow with.

Zoho Billing arguably offers the best plan configuration for every service industry, from SaaS to membership, fintech, and consulting.

Different Pricing Models for Plans 

Subscription plans are not always a single plan. You are free to add as many plans for the service as you like, with different inclusions and limitations for each.  Zoho Billing allows multiple pricing models that help your services evolve naturally.

Flat Pricing

Flat pricing suits businesses whose service value remains consistent every month. Customers pay a fixed, recurring amount regardless of usage, providing simplicity for customers and stability for businesses.

Best Fit for:

• Field Services or pre-booked services.

• Legal or Accounting Services.

• Financial services.

• Memberships

Strategic Advantage:

Flat pricing reduces customer decision-making and makes your offering easy to understand and market.

Unit-Based Pricing

This pricing is transparent and straightforward. It allows you to charge your clients per user, per device, per site or per hour.

Best Fit for:

• IT services.

• HR or accounting services.

• Maintenance industries.

Strategic Advantage:

Unit price gives clarity, and customers instantly understand what they're paying for.

Tier-Based Pricing

This pricing model allows you to charge exactly based on the pricing tier. Customers move through predefined tiers based on usage (eg, hours, tickets, devices, etc). Each tier has its own price and benefits.

Best Fit for:

• Growing teams with varying usage.

• Service levels such as Basic, Standard, and Premium.

Strategic Advantage:

Tier creates a natural upgrade path and fair, usage-based billing.

Volume-Based Pricing

This pricing method provides a single rate based on total usage. This provides the convenience of offering lower rates for high-volume purchases.

Best Fit for:

• Device management

• Bulk service consumption.

Strategic Advantage:

Volume pricing encourages customers to consume more to unlock better pricing.

Package-Based Pricing

Packaging typically means combining one or more services into fixed bundles. This is popular as it appears to be more value for money.

Best Fit for:

• SaaS Businesses

• Streaming Services.

Strategic Advantage:

Package or bundle pricing increases product/service perceived value and simplifies decision-making.

 What Subscription Plans Do for Your Business 

Implementing plans shifts your service from "bill me monthly" to "subscribe to what fits me". It enhances customer experience and streamlines your operations.

With plans, your business gains predictable and stable recurring revenue. It automates changes to the subscription, including upgrades, downgrades, and cancellations. It makes it easy for customers to scale based on their requirements.

For CFOs and CEOs, Zoho Billing provides reports based on plans that envision the possible positioning of their product/service based on pricing, location, region or customer purchase behaviour.

That's the real power of subscription plans. They turn recurring services into recurring growth with more structured, predictable and strategically aligned for scale. 

Up Next: Services Never Stop with just Plans.

• Topic Participants

• Hari Hara Sudhan. S

  

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