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Usage-Based Pricing Model
Why this model fits you
Your customers get incremental value from each action, API call, or transaction
Usage is the clearest proxy for value delivery
Customer needs vary widely—some use your product heavily, others sporadically
You can easily measure and meter consumption

Key Benefits
Fairness: Customers pay for what they use
Growth alignment: Your revenue grows as customer usage grows
Lower barriers: Small customers can start cheap and scale up
Natural expansion: No sales motion needed for upsells
Considerations
Customers may want usage predictability/caps
Requires robust metering infrastructure
Need clear communication about cost management
May need commitment tiers for enterprise deals

The Complete Guide to Outcome-Based Pricing
Download our pricing playbook to learn how to structure your model to account for:
Choosing the right usage metric
Pricing metric best practices (Sam Lee framework)
Implementation checklist and system requirements
How to handle enterprise contracts with usage-based models
Outcome-Based Pricing Model
Why this model fits you
Your product delivers autonomous value with minimal customer effort
You can clearly measure and attribute business outcomes
Customers care more about results than usage
Your product "does the work" rather than being a tool for users

Key Benefits
Win-win alignment: You only make money when customers succeed
Differentiated positioning: Premium pricing model for premium outcomes
Removes adoption risk: Customers pay for value, not effort
Compounding value: As you improve the product, you capture more value
Considerations
Requires bulletproof outcome measurement and attribution
May need baseline/minimum fees for predictability
Sales cycles can be longer (proving ROI upfront)
Need clear definitions of what counts as an "outcome"

The Complete Guide to Outcome-Based Pricing
Download our pricing playbook to learn how to structure your model to account for:
Defining and measuring outcomes
Attribution frameworks that work
Hybrid approaches (base + outcomes)
Contract structures and risk-sharing models
Seat-Based Pricing Model
Why this model fits you
Value scales with team size or number of users
Your product is a productivity tool users interact with regularly
Usage per seat is relatively consistent
Customers value predictable monthly/annual costs

Key Benefits
Predictable revenue: Easy to forecast MRR/ARR
Customer budget-friendly: Finance teams love predictable costs
Simple to explain: Straightforward pricing structure
Natural expansion: Adding seats = expansion revenue
Considerations
Risk of "under-monetizing" power users who drive 10x value
May limit product adoption if teams are cost-conscious about adding seats
Hard to capture value from automation/AI features that replace seats
Need strategies for seat sprawl management

The Complete Guide to Seat-Based Pricing
Download our pricing playbook to learn how to structure your model to account for:
Optimizing per-seat value capture
Feature packaging and tiering strategies
Seat-based to hybrid transitions
Handling power users and seat sharing
Hybrid
Pricing Model
Why this model fits you
Your product delivers value through both access and consumption
Some features are seat-based, others are usage or outcome-based
Customers want cost predictability but usage varies significantly
You're in transition between pricing models or serve diverse segments

Key Benefits
Flexibility: Capture value from multiple dimensions
Predictability + fairness: Base fee covers costs, usage scales with value
Segment-friendly: Works for both small teams and enterprises
Future-proof: Can evolve components independently
Considerations
More complex to explain and sell
Requires clear communication about both pricing dimensions
Need sophisticated billing infrastructure
Finance teams may need education on variable components
Implementation Paths:
1. Explicit hybrid: Base seat fee + metered usage (e.g., $50/user/mo + $0.01/API call)
2. Implicit hybrid: Tiered packages with usage buckets (e.g., Pro plan includes 10K credits/mo)

The Complete Guide to Hybrid Pricing
Download our pricing playbook to learn how to structure your model to account for:
Designing hybrid model architecture
Balancing fixed vs. variable components
Packaging strategies for different segments
Migration paths from seat-based or usage-based models
Exploration Mode
Your pricing model is still taking shape—and that's okay.

What we noticed
Based on your responses, you're either:
Early in defining your products value metric.
Experiencing tension between multiple pricing approaches.
Serving diverse segments with different value drivers.
In the midst of a pricing transition.
What this means
You need a flexible pricing infrastructure that supports experimentation and iteration—not one that locks you into a single model.
Recommended Approach
1. Start with hypothesis: Pick the model closest to your value driver
2. Instrument everything: Meter usage, track outcomes, monitor engagement
3. Test with customers: Run pricing experiments with friendly customers
4. Iterate quickly: Modern billing should let you change pricing monthly, not yearly

The Pricing Experimentation Playbook
Download our pricing playbook to learn how to structure your model to account for:
Building a monetization operating model
Running safe pricing experiments
Key metrics to instrument early
How to align your team around pricing iteration


