Achieving True Collaboration: Revenue-based Pricing as an Alternative for Construction Management Software

30. June 2021 Written by Patricia Cuomo, Global Marketing Director Fonn, Inc.
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Historically, the construction industry has been slow or reluctant to adopt technology and software. There are an overwhelming number of software tools available, along with an overwhelming number of pricing models. This article identifies 3 major challenges ‘per user’ pricing poses for the construction industry.

Challenges of SaaS “Per User” Pricing

For an industry that’s been slow to adopt technology, the simplicity of per user pricing helped ease the pain of adding technology to make improvements in communicating with the field and home office. However, like many software technology advances, pricing models need to evolve with the complexity, sophistication and robustness of the applications themselves. Three of the most common issues that plague per-user pricing include:

1. “S
ticker Shock” Moving from Free to Paid

When a company moves from a “Free,” or low-cost version of a software solution, the experience can be costly and frustrating for the customer. Even a small company who wants to upgrade or grant access to every user, may have just added thousands of dollars to their budget when annualizing the upgrade. Per user pricing adds up quickly forcing companies to limit access to just a few users. Limiting access frequently results in limiting the flow of information to all stakeholders—creating silos and barriers to access to critical data.

2. Exclusivity

Another common issue is that inherently, per user pricing limits access to all stakeholders in a project. Companies with a set budget for a set number of users may unknowingly restrict flow of information. If only 5 people have access and input to all the information on a project, how will they share it with the rest of the Team? In addition, perceived value across the organization may be compromised if members of the Team who need to give or receive input for a project are unable to do so.

Imagine a commercial general contractor with multiple projects, trying to communicate with multiple workers or subcontractors (at multiple jobsites!) with only 5 logins to the project management software tool they’re using. Often the result is the next common issue: shared log-ins.

3. Shared Logins

Shared logins compromise data accuracy by having multiple people entering information in multiple ways. Not only does this create delays for those “waiting their turn” to log in, but it also creates potential security and administrative concerns. (Who’s tracking how many people have the login information?) Subsequently the lack of real-time access and dissemination of information to the rest of the team is perpetuated. Not to mention, trying to track down the true source of information when questions arise can be a mess.

Enter Revenue-based Pricing

What if there was a way to price SaaS with a model that places no restrictions on the number of users, each user has permission based access to features leaders want them exposed to, users can be added and removed as necessary, shared logins are eliminated, and pricing is determined by the customer’s annual revenue?

Consider: if all the functionality of an application is there from the time a customer subscribes, it’s available to every user on a single platform, and the number of users is unlimited. Using a revenue-based model allows companies to pay one price that promotes inclusivity and productivity based on their company size. True collaboration is the resulting outcome.

While using revenue as a “tier” for pricing may seem intrusive at first, it actually gives those seeking to adopt technology into their construction business a clearer path to successfully do so. It creates transparency for budgeting and allows companies the ability to scale with the same application as their business grows. For those in the field, siloes of information are eliminated, communication is streamlined, costly mistakes become preventable, and productivity is vastly improved. Ultimately construction companies and their workers are empowered to complete projects on-time and on budget.

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