Usage-Based Pricing
Usage-based pricing is a go-to-market model where the customer pays based on how much they use your product or service.
It goes by many names: consumption-based pricing, pay-per-use pricing, and pay-as-you-go pricing.
The simplest examples of these are utility bills like water and electricity.
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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 yo...
The 3 levels of Deploying Usage-Based Pricing
Level 1: Pay As You Grow
This model increased...
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