SaaS subscription management: Tools and strategies for success

In SaaS, efficient subscription management is critical for driving revenue. In fact, it’s expected that 30% of organizations will have a Chief Revenue Officer by 2030. This article explores the key tools and strategies that help SaaS businesses to thrive in the subscription economy.

You'll learn:

• What SaaS subscription management is, and why it's crucial for scaling businesses
• Must-have features to look for in a SaaS subscription management platform
• Effective strategies for optimizing your subscription management
• How Orb simplifies subscription management and helps businesses succeed

Let’s get started by explaining what SaaS subscription management is at its core. 

What is SaaS subscription management?

SaaS subscription management involves the methods and tools used to manage billing, subscriptions, and renewals for SaaS products. It automates recurring billing, a key aspect of this process, ensuring a smooth and consistent revenue stream. 

This automation improves the customer experience by simplifying payments. It also allows businesses to focus on other strategic tasks. Effective subscription management plays a vital role in revenue retention and growth. How? By reducing churn and providing valuable insights into customer behavior and subscription patterns.

It’s a system that ensures you get paid on time but also helps you understand your customers better. By tracking how customers interact with your subscriptions, you can spot potential issues or opportunities to improve their experience. 

For instance, if you see a trend of customers downgrading after a certain period, you can investigate why and take corrective action. This proactive approach helps retain customers and drives revenue growth.

What does a good SaaS subscription software offer?

A good SaaS subscription management software or SaaS subscription platform offers features like automated invoicing, payment reminders, and detailed reporting. These features help businesses stay on top of their financials, identify trends, and make informed decisions about their subscription offerings. 

It's like having a dedicated team managing your subscriptions, ensuring everything runs smoothly and efficiently.

Furthermore, effective subscription management allows for greater flexibility in pricing and packaging. You can easily offer different subscription tiers, usage-based pricing, or even customized plans. This flexibility helps attract a wider range of customers and cater to their specific needs, ultimately leading to increased revenue.

Why a dedicated platform matters

Using a dedicated SaaS subscription management platform offers notable advantages. These platforms are designed specifically for subscription businesses, offering features that simplify billing, automate tasks, and provide valuable insights into customer behavior. 

They also integrate with other essential business tools, such as customer relationship management (CRM) and accounting software, creating a unified system for managing all aspects of your subscription business.

By investing in a robust SaaS subscription management platform, you can gain a deeper understanding of your customers and their needs. This ultimately leads to happier users, less churn, and more revenue growth. But what about scaling? That’s what we’ll discuss next. 

Why SaaS subscription management is critical for scaling businesses

SaaS businesses thrive on recurring revenue. It provides a predictable revenue stream, which is vital for planning, investing, and ultimately, scaling the business.

Instead of relying on one-time purchases, SaaS companies establish long-term relationships with users who pay for access to their software over a period of time. This recurring revenue model fuels growth and allows firms to reinvest in product development, customer acquisition, and other key areas.  

The thing is that managing subscriptions comes with its own set of challenges. Let's take a look at a few of them:

• Deferred revenue tracking: Accurately accounting for deferred revenue is key for SaaS businesses. This process involves recognizing revenue over the subscription period, not just when the payment is received. 
  
  Proper tracking confirms compliance with accounting standards and provides a clear picture of the company's financial health.

• Customer retention and churn prevention: Keeping customers happy and subscribed is vital for sustainable growth. 
  
  Churn is the rate at which customers cancel their subscriptions. This factor can seriously impact a SaaS business's bottom line. Effective subscription management helps pinpoint at-risk customers and implement strategies to improve retention.  

• Complex billing structures: Many SaaS companies offer various pricing models. Think usage-based, tiered, or per-user pricing. Managing these different structures can become complicated, especially as the business grows and the customer base expands.  

Note: Managing subscriptions at scale requires the right tools. A dedicated billing platform like Orb simplifies invoicing, payment processing, and revenue recognition — confirming compliance and optimizing cash flow. 

Advanced analytics also help businesses understand churn patterns and improve retention strategies, setting the stage for long-term growth.

Key features to look for in a SaaS subscription management platform

Choosing the right SaaS subscription management platform can make a real difference for your business. But with so many options available, how do you know what to look for? Here are four indispensable features that should be at the top of your list.

Key feature 1: Automated billing

Automated billing does more than just send invoices. A truly helpful platform will automate the entire billing process. Think generating invoices and processing payments. It can also help with sending automated reminders and handling failed transactions. 

These platforms help reduce manual effort and minimize the risk of errors that can occur with manual processing.

Quick example

Imagine this: A customer upgrades their subscription mid-cycle. The platform automatically calculates the prorated amount, generates a new invoice, and updates their payment schedule. 

This level of automation saves you time and ensures accurate billing, even with complex subscription changes.

Key feature 2: Flexible pricing models

Your pricing strategy is a key lever for growth. A good SaaS subscription management platform should support a wide range of pricing models. Think tiered plans, usage-based billing, and hybrid approaches. 

This variety allows you to cater to different customer needs and preferences, experiment with new pricing strategies, and ultimately, optimize your revenue generation.

Quick example

You might offer a tiered pricing model with different features and usage limits at each level. Or, you could implement usage-based billing where customers pay only for what they consume. 

A flexible platform allows you to easily switch between models or even combine them to create custom plans that match your customers' needs.

Key feature 3: Subscription analytics

Data is essential for making smart business decisions. A robust SaaS subscription management platform provides detailed analytics and reporting on your subscription performance. 

You can gain insights into key metrics like monthly recurring revenue (MRR), churn rate, customer lifetime value (CLTV), and more. This data helps you understand what's working and what's not, allowing you to make informed decisions to improve your business.

But it's not just about raw numbers. The best platforms provide tools to visualize trends, identify patterns, and segment your customer base. They allow you to understand the "why" behind the numbers. 

Quick example

For instance, you might discover that users on one pricing plan have a higher churn rate. This insight could lead you to adjust your pricing strategy or offer targeted support to those customers.

Key feature 4: Seamless integrations

Your SaaS subscription management platform shouldn't be an island. It should integrate with other essential business tools. These tools include your CRM, payment gateways, and analytics platforms. 

Integrations provide smooth data flow across your systems, eliminating manual data entry and reducing the risk of errors.

Quick example

For instance, integrating with your CRM allows you to instantly update customer records with subscription information. You’re making sure that your sales and support teams have access to the latest data. 

That means you’re allowing them to provide better service and identify upsell opportunities. Integration with payment gateways facilitates payment processing and reduces manual reconciliation efforts.

Extra pro tip: Done-for-you billing platforms like Orb offer a combination of flexibility, automation, and deep analytics. With the right solution, businesses can scale without limitations, automate billing, optimize pricing strategies, and gain key insights from subscription analytics.

What pricing models can SaaS subscription platforms handle?

SaaS subscription platforms are designed to handle a variety of pricing models, giving you the freedom to choose the best fit for your business and customers. Here's a breakdown of some common pricing models these platforms can manage:

• Tiered pricing: This model offers different subscription tiers with varying features and price points. Think of it like choosing a seat on an airplane. Each tier offers a different level of service and amenities at a corresponding price. This model allows you to cater to a wider range of customers with different needs and budgets.
  
  
• Usage-based billing: With usage-based billing, customers pay only for what they use. This is like paying for your electricity bill — you're charged based on your actual consumption. 
  
  This model is particularly appealing to customers as they only pay for the value they receive. It can also incentivize them to use your product more, leading to more revenue.

• Per-user pricing: In this model, the price is determined by the number of users who have access to the software. 
  
  This is common for collaboration tools or platforms where each user needs an individual account. It's a simple and transparent pricing model that scales with the customer's needs.

• Flat-rate subscriptions: This is the most straightforward model, where customers pay a fixed price for access to the software, regardless of usage or features. 
  
  It offers predictability for both the customer and the business. It's often used for products with a well-defined set of features and a target audience with consistent usage patterns.

• Hybrid models: Many businesses opt for a hybrid approach, combining elements from different pricing models. This approach allows you to create custom plans that cater to specific customer segments or product offerings. 
  
  For example, you might offer a base subscription with a set of core features and then charge extra for add-ons or usage beyond a certain threshold.

Done-for-you billing platforms like Orb support all of these pricing models. Orb provides the flexibility that enables businesses to design a pricing strategy that aligns with their goals and customer needs. You can experiment, adapt, and optimize your pricing to keep both customer satisfaction and revenue high. 

5 tools for SaaS subscription management

Efficient subscription management is vital for any SaaS business looking to thrive. Here are five platforms to keep an eye on.

1. Orb

Orb is a powerful billing platform that simplifies usage-based billing for SaaS companies. It's designed to handle high volumes of data and complex pricing models with ease, making it an ideal choice for businesses that are looking to scale their billing operations or have run into limitations with their existing billing solution.

Pros

• Handles complexity and scale: Orb is designed to handle the complexities of usage-based billing and high volumes of data. By ingesting raw usage data and separating it from pricing, Orb’s unique and scalable architecture ensures that your billing operations can keep pace as your business grows and evolves. 
  
  Dozens of SaaS companies are already sending millions of usage events to Orb each second and using the platform to rapidly implement complex pricing models.
  

• User-friendly and integrates seamlessly: Orb offers a user-friendly interface that makes it easy to manage subscriptions and billing, even for non-technical users. No engineering is required to change pricing models, and its Versions and Migrations feature makes managing different subscription plans and moving customers from one plan to another effortless. It also integrates seamlessly with existing tech stacks, simplifying your operations and reducing manual effort.
  
  
• Excellent support and guidance: Orb provides dedicated support and guidance to help you implement and optimize your usage-based pricing strategy. They act as a trusted partner, offering expertise and best practices to ensure your success.
  

Cons

• Pricing: Orb's pricing may be higher than some other platforms, especially for those with simple billing needs. However, its powerful features, flexibility, and scalability make it a worthwhile investment for businesses looking to optimize their billing and revenue.
  
  
• Focus on usage-based billing: While Orb supports various pricing models, its core strength lies in usage-based billing. Businesses with basic subscription models may find it to be overkill. 
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2. Chargebee

Chargebee is a popular cloud-based subscription management platform that automates billing, invoicing, and revenue operations for subscription businesses. 

It's known for its user-friendly interface and extensive features, making it a solid choice for businesses of all sizes.

Pros

• Extensive integrations: Chargebee integrates with a wide range of popular payment gateways, accounting software, and CRM platforms, allowing you to connect it with your existing tech stack.
  
  
• Global reach: Chargebee supports multiple currencies and payment gateways, making it a good choice for businesses with a global customer base. It also helps you navigate international taxes and compliance requirements, simplifying global expansion.
  
  
• Free trial and flexible pricing: Chargebee offers a free trial for new users, letting you test the platform before committing to a paid plan. It also provides a tiered pricing structure based on your monthly recurring revenue, making it suitable for companies of all sizes.
  

Cons

• Cost can escalate: Chargebee offers a free plan, but its pricing can become expensive for high-growth businesses due to overage fees. These fees are charged when your billing volume exceeds a certain threshold, which can seriously impact your costs as your business scales.
  
  
• Occasional bugs and support challenges: Some users have reported encountering bugs and experiencing delays in customer support response times. While Chargebee generally offers good support, these occasional issues can be frustrating for businesses that rely on timely assistance.
  
  
• Complex user interface: Despite its user-friendly design, Chargebee's interface can be overwhelming for some users, especially those new to subscription management platforms. Navigating the various features and settings can take time and require some training.
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3. Recurly

Recurly is a subscription management and recurring billing platform that helps businesses automate their billing processes, manage subscriptions effectively, and gain valuable insights into customer behavior.

Pros

• Flexible subscription models: Recurly supports a wide range of subscription models, including fixed, tiered, usage-based, and hybrid pricing. This allows you to cater to different customer needs and experiment with various pricing strategies to find the best fit for your business.
  
  
• Developer-friendly: Recurly offers a comprehensive API and webhooks, making it a good choice for businesses with technical resources who want to customize their billing workflows and integrate with other systems.
  
  
• Security and compliance: Recurly prioritizes data security and compliance with industry standards like Payment Card Industry Data Security Standard (PCI DSS). This ensures that your customer data is handled securely, and your business operations meet regulatory requirements.

Cons

• Less intuitive interface: Compared to some other platforms, Recurly's user interface can be less intuitive, especially for non-technical users. It may require a steeper learning curve and more time to master its features and functionalities.
  
  
• Scalability concerns: While Recurly can handle a certain level of growth, it may not be the most scalable solution for businesses experiencing rapid expansion. Companies with complex billing needs may find that Recurly's performance becomes a bottleneck.
  
  
• Limited customization: Although Recurly offers some flexibility, it may fall short when it comes to highly customized billing scenarios. Businesses with unique pricing models or intricate workflows may find Recurly restrictive.
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4. Zuora 

Zuora is an enterprise-grade subscription management platform designed for large businesses with complex billing needs. It offers a full suite of tools for managing subscriptions, billing, and finance operations, making it a powerful solution for established companies with dedicated finance teams.

Pros

• Scalability: Zuora is built to handle high volumes of transactions and complex billing scenarios, making it a suitable choice for large enterprises with high growth. It can accommodate increasing subscriber volumes and adapt to evolving billing needs too.
  
  
• Advanced financial features: Zuora offers a wide range of advanced financial management capabilities. These include revenue recognition, accounting integrations, and customizable reporting.
  
  
• Excellent customer support: Zuora is known for its responsive and helpful customer support team. They provide dedicated support and guidance to ensure a smooth onboarding experience and ongoing success with the platform.
  

Cons

• High cost and complexity: Zuora is a premium platform with a high cost of ownership. Its complex setup and extensive features can be overwhelming for smaller businesses or those with simpler billing needs.
  
  
• Occasional instability and rigidity: While Zuora is generally stable, some users report occasional system instability and rigidity in certain features. This can be a concern for businesses that require high uptime and flexibility in their billing operations.
  
  
• Reporting limitations: Although Zuora offers reporting functionality, some users find it less robust and user-friendly compared to other platforms. Generating highly customized or granular reports may require additional effort or customization.
  
  

5. Paddle

Paddle is a revenue delivery platform specifically designed for SaaS companies. It handles everything from billing and checkout to tax management and global compliance, simplifying the complexities of selling software globally.

Pros

• Merchant of Record (MoR) model: Paddle acts as the MoR for your business, assuming responsibility for legal and financial compliance related to global sales. It reduces risk for SaaS businesses, especially those expanding into new markets.
  
  
• Developer-friendly tools: Paddle offers integrations with development tools and platforms, making it easier for developers to manage subscriptions and billing within their existing workflows.
  
  
• Focus on SaaS: Paddle is specifically designed for SaaS companies, offering features and functionalities tailored to their unique needs. This includes support for usage-based billing, recurring subscriptions, and other common SaaS pricing models.

Cons

• Pricing: Paddle's pricing can be complex and may not be suitable for all businesses. It charges a percentage fee and a transaction fee per checkout, which can become expensive for high-volume businesses.
  
  
• Customization limitations: While Paddle offers a good range of features, its customization options may be limited compared to other platforms. Businesses with highly unique billing needs may find it restrictive.
  
  
• Support challenges: Some users report challenges with Paddle's support responsiveness. While they offer support resources, getting timely assistance or resolving complex issues can sometimes be difficult.

5 strategies for success in SaaS subscription management

Effective SaaS subscription management is about strategically managing the entire subscriber lifecycle to maximize user satisfaction and revenue. Here are five key strategies to help you achieve success.

Personalized onboarding

First impressions are crucial. A personalized onboarding experience can set the stage for a long and fruitful customer relationship. Instead of a generic approach, tailor the onboarding process to the specific needs and goals of each customer. 

This process might involve offering product tours highlighting features most relevant to their use case, providing proactive support from a dedicated customer success manager, or creating customized learning resources that address their specific challenges.

Extra tips

Go beyond the initial setup and continuously monitor customer behavior and engagement. Use this data to trigger automated emails with relevant tips, best practices, and helpful resources that guide the user toward achieving their desired outcomes with your product. 

Remember: By investing in personalized onboarding, you can increase customer satisfaction, reduce churn, and drive product adoption. When customers feel understood and supported from the start, they are more likely to have a positive experience and stick around for the long term.

Flexible pricing options

Recognize that customer needs and budgets vary greatly. Offering a range of pricing options allows you to cater to this diversity and increase the likelihood of each customer finding the perfect plan. 

This approach might include tiered plans with varying features and usage limits, or usage-based billing for customers who prefer to pay only for what they consume.

Extra tips

Consider offering discounts for annual subscriptions or volume-based pricing for larger teams. Providing options empowers customers and allows them to choose the plan that best aligns with their budget and how they intend to use your product.

Flexible pricing options attract a wider customer base, increase customer lifetime value, and improve overall satisfaction. When customers feel they have a choice and are getting good value, they are more likely to remain loyal to your brand.

Proactive communication

Build trust and transparency by keeping your customers informed throughout their subscription journey. Proactively communicate important updates, such as upcoming renewals, plan changes, payment issues, or new feature releases.

Extra tips

Use a variety of communication channels to reach your customers effectively. Doing so might include automated emails for renewals and payment confirmations, in-app notifications for product updates or usage alerts, and custom messages for key accounts or high-value users.

By maintaining proactive communication, you can reduce churn, improve customer satisfaction, and increase customer lifetime value. Keeping customers informed and engaged fosters a positive relationship and encourages them to fully utilize your product and explore new features.

Upsell and cross-sell opportunities

Your existing customer base is a valuable source of potential revenue growth. Identify opportunities to upsell or cross-sell by offering additional value that aligns with their needs and goals.

Extra tips

Use data and analytics to understand customer behavior, spot usage patterns, and segment your customer base based on their needs and potential. Doing this allows you to spot high-value customers who are prime candidates for upgrades to higher-tier plans with more features or increased usage limits. 

You can also promote complementary products or services that enhance their existing subscriptions. Strategically offering upsell and cross-sell opportunities increases customer lifetime value, boosts customer satisfaction, and drives further product adoption. 

Remember: A subscription management system supports these strategies by offering real-time analytics, automated workflows, and flexible billing structures. With the right tools, companies can improve user retention, personalize their experience, and maximize revenue growth.

Challenges and best practices for SaaS subscription management

While SaaS subscription management offers significant benefits, it also comes with its own set of challenges. Let's explore some common obstacles and best practices to overcome them.

Challenge 1: Manual billing errors

Relying on manual billing processes can be a recipe for disaster. Human error is inevitable, and even small mistakes in invoices can lead to significant consequences. Incorrect invoices can frustrate customers, disrupt cash flow, and damage your brand's reputation.  

Best practice: Automate your billing and invoicing processes to minimize errors and ensure accuracy. A robust SaaS subscription management platform can automate invoice generation, payment processing, and handling complex billing scenarios like proration and discounts. 

• Orb's solution: Orb's automated billing features guarantee accurate and reliable invoicing, eliminating the risk of manual errors. 
  
  Our flexible pricing engine allows you to easily handle various pricing models and complex billing scenarios, making sure that your invoices are always correct and delivered on time.  

Challenge 2: High customer churn rates

Retaining customers in the competitive SaaS market is an ongoing challenge. Churn, the rate at which customers cancel their subscriptions, can significantly impact your recurring revenue and hinder your growth.  

Best practice: Implement a data-driven approach to churn management. Use churn analytics to identify at-risk customers, understand the reasons behind cancellations, and proactively implement retention strategies.  

• Orb's solution: Orb provides detailed churn analytics and reporting, giving you valuable insights into customer behavior and subscription trends. This data allows you to spot churn risks early on and take steps to retain customers.

Challenge 3: Limited pricing flexibility

Rigid pricing models that fail to address the diverse needs of your customer base can limit your growth potential. Customers have varying budgets, usage patterns, and feature requirements. Failing to cater to this diversity can lead to missed opportunities and lost revenue.

Best practice: Offer flexible pricing options that cater to different customer segments. This might include tiered plans with varying features and usage limits, usage-based models that align costs with consumption, or even custom plans tailored to specific customer needs.

• Orb's solution: Orb's flexible pricing engine allows you to easily implement and manage a variety of pricing models. You can experiment with different pricing strategies, offer customized plans, and adapt your pricing as your business evolves.  

Challenge 4: Lack of visibility into subscription trends

Without clear insights into your subscription data, it's difficult to forecast growth, pinpoint potential issues, and make informed business decisions.

Best practice: Leverage subscription analytics to track key metrics, identify trends, and understand customer behavior. Monitor metrics like monthly recurring revenue, churn rate, customer lifetime value, and average revenue per user to gain a 360 view of your subscription business's health.

• Orb's solution: Orb provides robust analytics and reporting features that give you a deep understanding of your subscription performance. You can track key metrics, visualize trends, and segment your customer base to identify areas for improvement.

Orb simplifies SaaS subscription management

We've explored the essential tools and strategies for successful SaaS subscription management, and it's clear that having the right platform can make all the difference.

Orb is that platform. 

Orb empowers SaaS and GenAI companies to unlock their usage data. We help enable flexible pricing, easier billing, and faster growth — all without the constraints of rigid billing systems.

Here's how Orb can simplify your SaaS subscription management and fuel your growth:

Flexible pricing models

Orb supports a wide array of pricing models. These include usage-based, tiered, and hybrid models, giving you the freedom to design a pricing strategy that perfectly aligns with your business goals and customer needs.

Automated invoicing

Orb simplifies your billing cycles by automating invoice generation and delivery. This Orb advantage reduces manual effort, minimizes errors, and guarantees timely and accurate billing every single time.

Churn analytics

Orb provides real-time data and insightful analytics to help you monitor and reduce customer churn. Identify at-risk customers, understand churn patterns, and implement retention strategies.

Integration-friendly

Orb integrates with your existing tech stack. Think CRMs, payment gateways, and analytics platforms. This ensures smooth data flow, eliminates manual data entry, and simplifies your operations.

Customizable reports

Gain valuable insights into user behavior, revenue trends, and subscription performance with Orb's customizable reports. Make data-driven decisions to optimize your pricing, product offerings, and customer experience.

Orb in action: An in-depth look at Orb case studies

Still on the fence about Orb? Let’s take a look at some real-world case studies where Orb made a huge difference:

Pinecone: Managing multi-product usage-based pricing

Pinecone is a leading provider of serverless vector databases. It faced challenges managing its increasingly complex billing structure as they rapidly scaled. With the launch of a new product on the horizon, they needed a robust and flexible solution that could act as a single source of truth for their billing data.

Orb provided the answer. By implementing Orb, Pinecone gained the ability to:

• Manage multi-product usage-based pricing: Orb's flexible pricing engine allowed Pinecone to implement sophisticated usage-based pricing models across their multiple product offerings.
  
  
• Automate invoicing: Orb automated the generation and delivery of detailed invoices, freeing up valuable time and resources for Pinecone's finance team.
  
  
• Gain a single source of truth: Orb provided a centralized platform for all billing data, ensuring accuracy and consistency across different teams.

Vercel: Scaling complex billing for 60+ products

Vercel is a popular frontend-as-a-service platform. It needed a billing solution that could keep pace with its rapid product development cycle and handle the complexities of its diverse product offerings. 

With over sixty products and numerous add-ons, Vercel required a platform that could provide accurate usage tracking, flexible pricing, and seamless integration with its existing systems.

Orb proved to be the perfect fit. By making use of Orb's capabilities, Vercel was able to:

• Gain a deep understanding of billable metrics: Orb provided a structured way to track and understand Vercel's complex billable metrics across its vast product catalog.
  
  
• Improve billing accuracy and efficiency: Orb's accurate usage tracking and automated invoicing reduced manual effort and improved billing accuracy, freeing up Vercel's engineering team to focus on product development.
  
  
• Scale with confidence: Orb's scalable architecture ensured that Vercel's billing operations could handle the high volume of usage data generated by its rapidly growing customer base.

Materialize: Scaling operations with Orb

Materialize, a leading provider of real-time streaming databases, needed a billing system that could handle its complex pricing structures and growing customer base. They chose Orb to power their billing operations and experienced the following benefits:

• Flexibility and scalability: Orb's flexible pricing engine allowed Materialize to implement and manage various pricing models, ensuring they could adapt to evolving customer needs and scale their operations efficiently.
  
  
• Accurate and shareable reporting: Orb's reporting functionality provided Materialize with accurate and shareable data for accounting, business reviews, and board meetings, improving transparency and decision-making.
  
  
• Deeper understanding of COGS: Orb's granular usage data and analytics enabled Materialize to gain a deeper understanding of their cost of goods sold (COGS) for each customer, informing their pricing strategies and business decisions.

Ready to unlock your growth potential? Learn how Orb can boost your SaaS revenue management by solving billing for you. Check out our flexible pricing options to find a plan that works for you.