Our platform has multiple variables we could potentially charge on (users, data storage, API calls, etc.). How do we pick one primary metric (or a simple combination) that best reflects value without over-complicating things?

Based on the guidance in our pricing strategy book, Price to Scale, here’s how you can approach selecting a primary pricing metric without over-complicating your model:

Identify Your Overall Pricing Model

Decide whether your model is primarily based on consumption (usage-driven) or capability (fixed-feature or lump-sum based). This larger model sets the stage for which metrics make the most sense.
For a consumption-based model, you need a measurable metric that scales with usage; for a capability model, you might be charging a flat fee per product or module.

Evaluate and List Potential Usage Metrics

For a consumption-based approach, list the variables you currently track (users, data storage, API calls, etc.).
Consider which of these best represents the customer’s perceived value and your underlying costs. The book suggests that the pricing metric should allow you to capture revenue in a way that larger customers can pay more while ensuring smaller customers only pay for what they use.

Apply a Simplification Checklist

Ask: "Which metric or simple combination of metrics is most directly tied to the value the customer derives from the product?"
Consider metrics like per API call or per automated transaction if those are closely tied to performance and added value. The book provides a Mini check-list, emphasizing that:
• The chosen metric should align with customer value and usage patterns.
• It should maximize revenue potential by linking cost directly to usage rather than a flat rate.

Assess Measurement and Implementation

Ensure that your selected metric is easily measurable and scalable across diverse customer bases.
Avoid overly complex combinations; a single, clear metric (or a simple combination) will reduce friction in the sales process and operational complexity, as noted in Chapter 3 of Price to Scale.

In summary, begin by defining whether you’re leaning toward a consumption or capability model, then evaluate which usage metric best aligns with both customer value and your cost structures. Simplicity in measurement and clarity in value delivery are your key goals. This streamlined approach, as outlined in our book, helps ensure your pricing is efficient and aligned with market needs.