Would a hybrid pricing model (for example, a base subscription plus usage fees) better align price with our product’s value, or just complicate things?

Based on the guidance in our SaaS pricing book, Price to Scale, a hybrid pricing model can indeed better align your price with your product’s value—provided the metrics you use clearly reflect that value and the usage is measurable.

Here are some key points from our book to consider:

• Value Alignment:
Price to Scale highlights that the right pricing metric is one that directly ties to the value received by the customer. A hybrid model, which combines a base subscription fee with usage fees, allows you to set a predictable base price while capturing additional value as usage increases. This modular approach means that customers pay more as they derive more benefit from your product, creating an alignment between cost and value delivered.

• Managing Hard Costs:
Our book explains that usage-based pricing is particularly useful when there are hard costs that scale with usage (such as data storage or compute power). By incorporating a usage fee, you can directly pass on these incremental costs to your customers, ensuring that pricing remains sustainable and reflective of actual resource utilization.

• Mitigating Complexity:
While it's true that a hybrid model introduces an extra layer compared to a flat-rate subscription, our book emphasizes that complexity isn’t inherently negative—if executed well. The key is to choose usage metrics that are simple to measure and transparent to customers. When done right, the added complexity is outweighed by the benefit of having a pricing structure that more accurately captures value, fosters better client adoption, and resists leaving money on the table.

In summary, a hybrid pricing model can offer significant benefits in aligning price with product value through the use of distinct metrics for base functionality and additional usage. However, it is essential to maintain clarity and simplicity in how usage is measured and communicated. As discussed in Price to Scale, when your product’s usage is easily measurable and tied to real value, a hybrid model can be a powerful strategy rather than just a source of complexity.