Why Am I Paying for A SaaS Subscription I Haven’t Started to Use Yet?
April 28th, 2022 (Updated 03/10/2023) | 7 min. read
There’s nothing worse than having finally convinced the executives that the company needs new software than being called in a couple of months later to explain why they’re paying for a tool but haven’t had a chance to use all the features.
Having spent the last decade sharing our cloud-based offering with companies looking to optimize their pricing strategies and processes, we’ve had to answer this question often. And we get it. Buying software-as-a-service (SaaS) solution takes a definite mindset shift. But once you get it, you’ll see why paying for your software from day one makes sense, even if you haven’t configured all of the features in the phase just yet.
So, in this article we’ll try to help answer the question: why am I paying for a SaaS subscription I haven’t started to use yet?
The Move From On-Premise To SaaS
Back in the olden days (when on-premise was the thing) and you bought a new software license, it was a physical disk. A real person turned up to your specially acquired $100,000 server room and plugged your new software into it. It was a very tangible transaction and the software belonged to you—you had full control.
When things started to moving toward SaaS, many companies were reluctant. How would they have full control of a software they didn’t own? How could they ensure security if they didn’t manage their own servers?
But as they started to recognize the immense savings and improved security benefits they could make by not purchasing servers they started to come around to the incredible benefits of a SaaS set up. In addition to this, they saved so much time not managing updates and doing maintenance which resulted in less maintenance costs. In fact, they could be up and running faster than with on-premise, would always be on the latest version, and could easily extend to the newest technologies as they emerged.
The Great Mindset Shift
There was still one thing, though, that felt like it rubbed the wrong way.
When buying (actually, leasing) SaaS software, you hand over your hard-earned money in return for… a confirmation email and a password? You can’t help feeling a little slighted, so you log in only to find the solution is not ready to go: it’s not that it doesn’t do what it says on the tin, but it doesn’t yet do it the way you need it done. You realize there are weeks of customization / configuration ahead of you before you really get to “use” the software to deliver the value you bought it to deliver. Why, then, are you expected to pay for the license from day one?
Why Pay for SaaS From Day One?
Let’s look at it a different way.
Imagine you’ve been nominated for an Oscar (Congratulations!) and decide to get a suit tailored for the special occasion.
First you go to the haberdasher to pick out your fabric. Getting this part right is crucial. You need fabric that is just the right weight, construction, and drape for the type of suit you have in mind. One that offers good durability, comfort, and breathability and can deliver on your specific needs like waterproofing (for the after-party), stretch, and ease of care. Your requirements are many, so you look for one that is versatile enough to meet them all.
Once you’ve found the perfect sample, you order and pay for 12 meters of it to be delivered to your tailor.
Two weeks later, your tailor calls to say it’s arrived and you have a meeting to discuss how your suit should look. She takes your measurements, notes down all your wishes, and chooses the appropriate cut, thread, zippers, and buttons. Then she gets to work.
Another two weeks go by and she calls to say it’s ready. You go for a fitting and it’s perfect—minus a few tweaks here and there that you solve together. You pay, take the suit home, and hang it up ready to wear at the Oscars.
A week later, you strut down the red carpet wearing your brand new, specially tailored suit. You look sensational, darling. But it is now a full five weeks since you paid for the fabric for your suit, and you are only just getting the value out of it.
I’m sure you’ll agree that it would have been ludicrous to have suggested that you only pay the haberdasher for the fabric once you started wearing the suit. He’d have been out of pocket for five weeks, despite all the work he put into making his fabric so versatile that it could meet your every need. He sold you an out-of-the box toga that you could have put on the minute you walked out the door… but you wanted to customize it into something that fit better with your specific needs. That’s fair, but this process took time.
Unlocking The Built-in Potential
This customization phase wasn’t wasted time during which you weren’t getting any value from your fabric, it was time during which you helped realize the full potential of the fabric, by molding it to your exact requirements.
Without the fabric, this would not have been impossible. (Sure, you could have created a mock-up with the tailor before buying the fabric, but then you’d be retrofitting the fabric to your design, rather than building from the ground up. And backwards is never a good direction to be going if you want to move forward.)
Expecting not to pay for your SaaS solution until you actually start measuring value from it is like not wanting to pay either your haberdasher or tailor until Oscars night. However, the time between buying your fabric and walking down the red carpet is packed full of value. It’s time during which you get to learn, customize, and practice, to mold your new software to do exactly what you want it to do, the way you want it to do it.
If you want Time-to-Value to be instant, then you’ll have to be happy wearing a toga.
Your New Software Makes the Possibilities Possible
That’s why when you pay for SaaS software, you pay from day one. That’s when your vendor has spun up and hosted the instance. Even though it might feel like you’re paying for a temporary password and access to a vacuum of features; you’re actually hooked up to a wealth of possibilities you didn’t have before signing on the dotted line. And you can start working with them immediately.
Just as you’d never take your lease car back to the company after a month and try to claim back the days you didn’t use it, you can’t expect not to pay for software that you’ve parked in your driveway. You have it at your disposal, ready to take for a spin at any time.
Getting value ≠ Return on Investment.
With SaaS, You Get Value from Day One
We get it. It’s a hard sell. You pass the invoice up to the executives, and they say, “Wait, we’re not going to be live for four months? And we’re already paying $X,000?! What are we getting for that?”
You’re getting instant access to the software that you know is going to revolutionize your business processes and bring the tools and opportunities you need to excel in your market.
Its out-of-the-box features might not be set to your precise requirements (they’re designed to be customized to thousands of customers’ needs across multiple industries), nonetheless, it’s all in there for you to start working with from day one.
You’re getting your fabric, without which you don’t get your suit.
If you’d like to learn more about the phases of a software project so that you can better plan with your vendor the outcomes and features you need first, then check out this article below where we take you through the steps.