When to use usage based pricing - Deepstash

When to use usage based pricing

If your costs scale with usage then usage based pricing aligns your costs with your customers' spend. This prevents very large customers from being your worst customers, by generating lots of revenue, but costing you money because the account is gross-margin negative.

If you are pursuing a two step go-to-market strategy with which the first user has a low willingness to pay, but the ultimate buyer has a larger budget, consider usage pricing. This is a land-and-expand motion. 

If customers use the product intermittently and the value is intermittent, usage based pricing works well.

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liviu

My interests are many and eclectic. Product guy.

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Events-Based Billing: Leveraging Actions to Provide Value-Based Billing

The ability to bill customers based on how they consume your product is a powerful and non-arbitrary pricing methodology which effectively increases usage and revenue. 

By leveraging user actions to provide value-based billing, both you and your customers end up winning. 

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