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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 our Price to Scale book, pricing based on frequency of use can often be a better approach than simply charging for platform access—especially when usage directly translates into the value your customers receive.
Here are some key points from our pricing strategy book:
• When your product’s value increases with each interaction (for example, processing support cases, executing automated tasks, or any measurable action), a consumption-based or usage pricing model makes the customer’s cost proportional to the benefits they gain.
• Our book suggests evaluating your pricing metric by first deciding whether your model is a consumption model or a capability model. If your value delivery is incremental (i.e., each use adds measurable value), then a usage-based metric (like pricing per interaction) aligns pricing with customer success and revenue growth.
• This approach also offers the potential for volume-based discounts and revenue upside, since customers with higher usage will pay more as they derive more value—an idea we detail with structured pricing examples and checklists in the book.
In summary, if your customer’s perception of value is tied to how frequently they use your product, then pricing based on frequency of use is likely more appropriate than a simple access fee. It not only better mirrors the value delivered but also scales revenue in line with usage growth.
For further details, you might want to refer to the chapters on consumption versus capability pricing in our Price to Scale book.