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It’s not at all about your product, it’s about your customer, and you’re going to likely need both schemes. Usage based pricing works well for customers who va
by mlhpdx 2y ago
It’s not at all about your product, it’s about your customer, and you’re going to likely need both schemes.
Usage based pricing works well for customers who value flexibility more than predictability, and subscription pricing works well for those that prefer predictability (and probably want a discount). It makes sense. Customers in the first camp are growth oriented or otherwise undergoing a transformation of some kind. The latter group has stable operation and is looking to optimize.
Usage based pricing should be more expensive than subscription pricing to make up for the lower value multiple it gets should you raise or exit.