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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on the principles outlined in our pricing strategy book, Price to Scale, the answer is: It depends on which metric best reflects the value customers derive from your product as well as your cost structure.
Here’s how to think about it:
• Value Alignment – Our book stresses that the chosen pricing metric should closely correspond with the benefit the customer receives. If your product incurs higher costs during periods of peak use (for instance, in situations where resources like compute power or database connections become constrained), then peak concurrent usage may be a more accurate indicator of value than the total registered users.
• Cost Correlation – When hard costs scale with actual usage, as mentioned in Price to Scale (see the section discussing hard cost-based metrics), capturing peak concurrent usage can ensure that pricing reflects the true cost dynamics. In contrast, total registered users might include many inactive users, which can skew the perceived value and lead to pricing that doesn’t cover your infrastructure expenses during peak loads.
• Real-World Application – The book provides cases where companies have successfully tied their pricing model to a metric that is both intuitive and measurable for customers—such as monthly active users. The key takeaway is to select a metric that is transparent and easy for the customer to understand, while being closely linked to the operational realities of your service.
In summary, if your cost structure or service delivery is significantly affected by peak demand, then pricing based on peak concurrent usage may be the more strategic choice. Always validate this approach with both customer feedback and an analysis of your underlying cost drivers.