Answering questions about what the top line is going to grow to as new logos are added or as existing logos expand can be more challenging with UBP.

Manage Expectations for Predictability

<ul><li class="ql-align-justify">When implementing a UBP model, prioritize allowing for maximum usage flexibility and pricing transparency for your customer. </li><li class="ql-align-justify">Create the option for customers to commit to your product for an extended time period for a pricing discount.  </li><li class="ql-align-justify">Emphasize the benefits of UBP to your investors and get them excited about usage-based metrics. </li><li class="ql-align-justify">Don’t hesitate to automate financial processes when you are ready to scale.</li><li class="ql-align-justify">Don’t let your financial team exist in a vacuum. Collaborating with outside teams will help your team do their job more accurately and be prepared for change.</li></ul>

Usage-Based Pricing(UBP)

<ul><li>Pricing will change with a UBP model.</li><li>The finance team has to be able to adapt and move as these new insights arrive.</li><li>Take proactive measures to understand potential changes and prepare your teams for them.</li></ul>

What The Finance Team Needs To Do

Usage-based pricing removed a lot of friction for adoption.For customers, getting started is easy and with an emphasis on flexible usage, staying with the company becomes a no-brainer.Pricing transparency is also a huge selling point.

Removing Friction By Being Transparent

Financial processes need to clearly present different commitment and drawdown plans and track customer-specific contract terms.Whereas seat-based models can implement a third-party customer billing platform with relative ease, these billing platforms cannot readily account for all the features.

Automate Financial Processes to Scale

<ul><li>Your product and platform's intrinsic virality gives your investors confidence in continual top-line growth.</li><li>ARR is the metric that communicates how Datadog is performing today.</li><li>Usage-based annual recurring revenue (UARR) measures usage growth over time with any vertical customer.</li></ul>

Sell Your Investors on UBP With Redefined Metrics

I joined Datadog as VP Finance back in 2015 when the company was still very small. Back then, the company had about 100 employees, was making around $20