Why you should get to know the fixed pricing model for IT system costs

In a time of uncertainty, business naturally seeks stability. Especially when it comes to the operational costs. Having all the relevant information up front with no hidden fees or surprises fees is invaluable.

Managing IT costs can be a complex and often unpredictable task for organizations of all sizes. Whether you're an IT executive, CFO, or CEO, understanding the pricing models available for your IT systems is essential. One of these models is the fixed pricing model, which offers a range of benefits for businesses looking to control costs and improve financial predictability. The other is a variable pricing model, which can provide more flexibility but may come with higher risks and hidden costs.

At Traction Rec, we are dedicated to maintaining a fixed pricing model for our customers. Because it’s not just about controlling costs, it’s also about reducing stress and increasing productivity, allowing you to better serve your members and communities in the best ways possible.

Predictability, peace of mind, and smart future financial planning

While both fixed and variable pricing have their advantages in the recreational tech platform ecosystem, the predictability and peace of mind that fixed pricing offers are truly invaluable.

For organizations transitioning from a legacy technology system, the pricing model can significantly influence the decision-making process. While there are several factors to consider, we're believers that the fixed pricing model clearly stands out for delivering long-term benefits.

Making this decision is much easier with a strong partner by your side to guide you through the next phase of your technological journey. Here’s why we believe this approach is right for your organization and how it can revolutionize your financial planning.

Understanding pricing models

There are various pricing models out there, but in the recreational tech platform industry, the two big ones are fixed and variable pricing.

Fixed pricing explained

Imagine having a single, predictable fee from start to finish—that's fixed pricing. Once you agree on a set amount, say for the next three years, you're locked in. Under this model, there are no surprises, fluctuations, or unexpected price hikes, just smooth sailing with consistent costs for your technology, ensuring a stable financial foundation. Fixed pricing offers peace of mind and reliability. It's a sure thing.

At Traction Rec, our pricing is straightforward. Built on the Salesforce platform, our cost is determined by the number of users accessing the system, also known as a licensed model. This means you pay a set fee for each user, and that cost remains fixed. Whether you have one hundred or one thousand users, the cost per user remains the same.

<hr></hr>Since pricing terms often span multiple years, it’s important to think beyond the immediate future and consider where your organization aims to be in the next three to five years.<hr></hr>

As your organization grows, expanding your licenses and tool access is an easy step for your recreation center or nonprofit. This way, more of your team can take advantage of your technology to work efficiently, boost collaboration, and enhance data visibility and management, whenever the time’s right. It’s growth you can handle, and best of all, it’s a cost you can predict.

Variable pricing explained

The variable pricing model is based on a profit-sharing arrangement between the platform company and your organization. This variable fee can be calculated using various factors, such as the number of transactions or a percentage of your total revenue.

Variable pricing may seem appealing, especially for organizations that are just starting out, or those who have unpredictable revenue streams. At a glance, it may seem like a reasonable choice. If I make money, then I’m willing to share that with my partner. But if I don’t, I don’t want to be out of pocket. However, since you’re adopting technology with the intention to boost efficiency and profitability, your business is likely to grow. As your revenue increases, so will your costs under the variable pricing model, potentially making it more expensive in the long run.

Choosing the right pricing model

Like many things in life, it’s about taking a holistic approach in analyzing all angles of your organization and making a decision you’re comfortable with. With fixed pricing, you have the assurance of knowing your costs year to year. In contracts, variable pricing is just that. It’s variable and can change—sometimes significantly—year to year. It just comes down to what you’re comfortable with and making the best decision for your organization.

The benefits of fixed pricing

Budget predictability and stability: One set amount paid per agreed-upon term. No need to audit regularly as you know what the cost is.

Easier decision-making process: Transparency and simplicity make it easier to evaluate the needs of the organization; for example, simply adding a user license when the organization grows.

Scalability and long-term value: Supports scalability in a way that’s predictable and manageable; allows for planning without the fear of sudden cost increases.

Peace of mind: Not constantly wondering where you’re at with usage, where you are budget-wise, and whether you have the cash flow to support the project. Generally speaking, life is already complicated so let’s uncomplicate things as much as we can!

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The challenges of variable pricing

Cost uncertainty: While there’s a ceiling to fixed-pricing, there generally  isn’t one with variable pricing so you can never know with certainty what your costs will be year to year.

Complexity in management: The difficulty of managing costs when pricing is tied to variables like member numbers or usage volume.

Potential for hidden costs: Risks of unexpected fees or price increases in variable pricing models.

Making the right choice for your organization

What kind of appetite does your organization have for a sure thing versus taking a gamble? One major challenge of the variable pricing model is underestimating what the end costs could potentially be, which could impact your cost structure. The other is being short sighted with the future needs of your organization and not considering what your needs will be three, five or even ten years from now.

Long-term considerations

You’ll want to find a platform that will grow with your organization — reasonably. Some organizations, like Traction Rec, may offer a renewal cap so when the time comes to renew, rest assured you won’t be hit with an unexpected price increase. Since pricing terms often span multiple years, it’s important to think beyond the immediate future and consider where your organization aims to be in the next three to five years. Will the platform you’re on be able to scale with you? Are there technical capabilities to support future updates and configurations as you add more members and programs? These are just a couple of the many questions you’ll want to ask yourself.

Scalability and predictability through fixed pricing

The fixed pricing model supports scalability in a way that’s predictable and manageable. For organizations experiencing rapid growth, the ability to plan and scale without the risk of sudden cost spikes is invaluable. Fixed pricing provides this stability, allowing you to budget confidently and allocate resources effectively, knowing that your technology costs will remain under control as you expand.

By pairing our solution with Salesforce, we offer a package that’s inherently designed to grow with our customers. Salesforce’s extensive ecosystem and ongoing innovation means that our customers aren't just investing in a static tool—they’re investing in a dynamic platform that evolves with their needs over time. The fixed pricing model aligns perfectly with this, offering peace of mind that as you scale, your technology investment remains stable and predictable.

Future-proofing for continuous growth

Future-proofing goes beyond just managing costs—it’s about ensuring that the technology you invest in today will continue to meet your organization needs well into the future. As organizations grow, their operations become more complex and their technological demands increase. A future-proof solution can handle this complexity without requiring a complete system overhaul.

<hr></hr>Future-proofing with fixed pricing provides a solution that not only meets today’s needs, but is also equipped to tackle tomorrow’s challenges.<hr></hr>

Our partnership with Salesforce is key to this strategy. Salesforce is a leader in innovation, consistently updating and expanding its platform to address new business challenges and opportunities. By integrating our solution with Salesforce, we ensure that our customers have access to a platform that evolves alongside their needs. This means our customers can continuously innovate and optimize their operations without the fear of their technology becoming obsolete.

As organizations grow—whether by adding new programs or increasing their customer base — they need a platform that can seamlessly scale with these changes. Our solution, built on Salesforce, ensures that organizations don’t encounter technological limitations. Instead, they have a robust, scalable system capable of handling growth in all its forms—whether it’s an increase in transaction volume, the addition of new business units, or the need for more advanced analytics and insights.

The pricing model choice is clear

To us it is, anyway! Fixed pricing is the way to go. Set it and forget it! Shift your focus elsewhere in your organization, knowing that the technology powering your operations is going to be a reliable constant as you grow. Future-proofing with fixed pricing provides a solution that not only meets today’s needs, but is also equipped to tackle tomorrow’s challenges.

It’s about ensuring that your organization can stay focused on your core mission, confident that your technology will support you every step of the way. No disruptions, no unexpected costs, and no need to switch systems as you scale with a platform such as Traction Rec.

Choosing a CRM platform is a huge decision. One to be made thoughtfully and carefully. We’d love to provide some guidance on this topic and explore it further with you. Connect with us and let's start the conversation.