Low-Code Pricing is Broken - How to Fix It

For a long time, software pricing has been confusing. The complexity and adaptability of a lot of software applications means that there are many layers to pricing a product or service. This creates confusion and intimidation for someone buying software. For companies, price plays an important role in selecting business software. According to GetApp, 44% of companies claim price is one of their primary concerns when selecting software. Therefore, it’s in vendors’ interest to have a simple pricing structure.

Low-code app development platforms are a rapidly-growing technology within the software market. In fact, according to SPMarketResearch, the global low-code development platform market was valued at $5.6 billion in 2018, and is expected to reach $52.3 billion by 2024. With low-code platforms becoming such an important part of the digital strategy of many companies, you would think that its pricing works well. But it doesn’t — it’s broken.

What is Wrong With Low-Code Pricing?

John Rymer at Forrester contends that low-code pricing is confusing because “most pricing pages are either incomplete, opaque, or both.” Many of these pages have hidden costs, additional fees or complex pricing structures.

This means that to get a true representation of costs, buyers first need to speak to a salesperson. Therefore, while many prospects want to conduct their own research on pricing before engaging a vendor, they simply cannot. The fact that this is a pervasive problem across the industry means that pricing comparisons of competing vendors becomes very difficult, or even impossible.

While some vendors charge per user, others charge different prices for different types of users. Then, there are fees for platform instances, integrations, support and workflows. Then there is monthly billing vs annual billing to add another layer to the complexity. The pricing models used by many low-code vendors today are proving to be barriers to adoption at a time when most other categories of software have become more transparent and simple with their pricing.

How to Fix Low-Code Pricing

While it is important to acknowledge that it can be difficult to price software, especially as companies introduce new features to their product offering, fixing the problems with low-code pricing is relatively easy. There are only a few aspects of their model that vendors need to change. These changes are mostly related to transparency and comparability.

Transparency

Vendors need to be forthcoming on all the costs involved with the purchase of their product. If there are additional costs for variables such as additional users, additional database capacity, different types of integrations or more apps, these must be listed. A buyer should be able to get an accurate estimation of what a subscription would cost simply by looking at the vendor’s pricing page. Being transparent about pricing will immediately increase trust in the vendor, and help buyers make informed decisions.

Comparability

Being transparent about costs should lead to buyers being able to compare vendor pricing — which would turn focus to an even more important buying consideration: capabilities. Vendors who believe they provide leading capabilities should relish the opportunity to win business on those terms and allow buyers to decide for themselves.

At JourneyApps, we make a point of being transparent with our pricing while also keeping it simple. Our leading technical capabilities for use cases that involve end-users in challenging field conditions are where we deliver unique value to customers and we seek to allow buyers to come to that conclusion themselves.

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In Conclusion

While products such as low-code platforms consist of complex and layered technologies, its pricing does not have to be complex. Software pricing has always been a little complicated, but to ensure continued adoption, low-code platform vendors must simplify their pricing. Be transparent about all the costs that are involved, and clearly indicate what these costs are. Allow the prospect to make comparisons with competitors without having to first engage with sales.


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