What level of granularity is ideal for a pricing metric — is charging per single unit too fine-grained (leading to noisy, complicated bills) and is it better to bundle usage into larger units for clarity?

Based on Price to Scale, the ideal level of granularity for a pricing metric really hinges on how predictable and measurable your usage is:

If your usage metric is highly predictable and easy to measure, you can afford to be more granular. This approach ties pricing closely to the value customers receive, aligning growth in usage with costs. However, it requires customers to trust the measurement and accurately forecast their usage.
If the metric is less predictable or difficult to measure, it’s generally better to bundle usage into larger units. Bundling helps avoid overly noisy or complex bills and delivers the clarity that purchasing groups often demand. Larger buckets smooth out the variances in usage and can simplify both sales and customer understanding.

To summarize, our pricing strategy book, Price to Scale, suggests starting by evaluating the predictability of your key usage metric. If it’s consistent, granular pricing per unit can work effectively. If not, consider adopting broader usage blocks to keep billing straightforward and user-friendly. This approach ensures that the pricing model not only scales with customer growth but also remains clear and accessible.

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