The Complete
Usage-based Pricing
Playbook
Understand if usage-based pricing is right for you, how you can align product value to end-user success, and scale with your customers.

Special thanks to

For sharing their insights

The report also combines data, analysis, and insights from pricing strategies and frameworks of 300+ businesses.

Tejeshwi Sharma
Managing Director, Sequoia India
Usage-based pricing is a win-win for both software vendors and their customers. Better alignment with customers’ organic growth reduces the pressure on sales teams and helps build a healthier business. So that makes usage-based pricing a fundamentally superior economic model. For customers, greater transparency  and the ease of dialing up/down usage dramatically shrinks the barriers to software adoption.

Key Takeaways From The Report

  • The integral tenets of usage-based pricing and their business impact
  • An efficiency flowchart to evaluate if usage-based pricing is right for your business
  • Benchmarks on usage-based pricing adoption in SaaS
  • An operational framework for getting started with usage-based pricing
  • Teardown of real-life pricing pages and examples in SaaS

 A Sneak-peek Into Our Usage-based
Pricing Playbook

We analyzed over 300 businesses, spoke to leading investors to understand the pros and cons of contemporary pricing models, and arrived at practical, actionable insights to help you decide if usage-based pricing is suitable for your business

Evolving With SaaS Sales From Vendor-led to Buyer-led Models

Changing macro-conditions, highly competitive markets, and democratic access to information are shifting the scales in the SaaS buying process, placing more power in the hands of the customers. It also directly influences the accountability of pricing models to move from the cost of capability ownership to the cost of tangible outcomes.

Shifting to usage-based pricing can help businesses overcome momentum inertia and reduce barriers to entry for customers by

  • Limiting expense risks on new SaaS purchases by tying product value directly to business usage value
  • Supporting businesses to scale feature usage as and when required - unused products don’t get billed for
  • Helping SaaS vendors monetize usage in proportion to their customers' growth 
  • Limiting churn by decreasing payment load on non-utilization

A Growing Appetite for Usage-based Pricing

Chargebee found that 74% of SaaS companies will likely offer more products on usage-based pricing in 2023 (up from 45% in 2021), as customers are increasingly more mindful of paying for what they use and need the flexibility to dial up or down their usage.

Also, 65% of early-stage businesses between $3-25 million in revenue are more open to adopting the usage-based pricing model, signaling that the pricing paradigm is shifting across segments.

Download the playbook to learn more

Evaluating if Usage-based Pricing is Right for your Business

Even the most significant of innovations are only helpful with context. While usage-based pricing can significantly reduce barriers to acquisition and make pricing more relevant to customer outcomes, it brings in a new set of caveats

  • Limiting expense risks on new SaaS purchases by tying product value directly to business usage value
  • Supporting businesses scale feature usage as and when required - unused products don't get billed for
  • Helping SaaS vendors monetize usage in proportion to their customers' growth 
  • Limiting churn by decreasing payment load on non-utilization

Yet, multi-product businesses like Snowflake and Datadog continue to implement usage-based pricing and post better net retention rates on average. With 85% of respondents to our survey indicating that they will continue iterating on usage-based pricing, it is clear that it will find its way into many companies' pricing models

Companies that succeed with UBP share significant commonalities, which, if you don't share, should steer you away from disrupting your existing pricing strategy.

Find out what they are in the report
Everything you ever wanted to know about usage-based pricing

Find actionable insights, industry benchmarks, implementation guides, best practices,
and commentary from leading experts on pricing

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