Simple Usage-Based Pricing
A usage-based price that increases with more usage.
What is Usage-Based Pricing?
Usage-based pricing means that your customers get charged based on how much they used your product or a specific feature of your product during a billing cycle. This is always a unit of measure, such as the number of lookups, the amount of storage, etc. This means your customers start paying relatively little when they first start using your product, but you still preserve the ability to increase your revenue over time because the price is ideally directly tied with the value a customer receives.
Why this model?
You indicated that the value your customers get from your product scales with a specific usage metric. Usage-based pricing ensures that your revenue directly matches the value your customers get from using your product – they’ve never being over or undercharged.
In order to make Usage-Based Pricing work, you have to find one or several usage metrics that are tied to the value your customers receive. You have to be careful when choosing these metrics since you don’t want to choose any metrics that actively discourage your customers from using your product.
Example: Algolia, Ahana