Recently, we brought together leaders from some of the most forward-thinking companies in AI, cloud infrastructure, and SaaS for our first-ever customer advisory board session. The group included OpenAI, Confluent, NVIDIA, Databricks, Replicate, and Fly.io—all of whom are deep in the weeds with usage-based pricing (UBP). Our goal was to better understand how businesses are currently tackling UBP, the challenges they face, and where they see billing and pricing evolving in the future.

It’s not news to many of us in this space that UBP is reshaping the way software companies charge for their products. With this shift comes a host of operational challenges—how to balance flexibility with predictability, how to ensure billing transparency, and how to empower customers to effectively manage their spend.

Here’s an overview of some of the best practices, challenges, and future-focused learnings from the discussion with these market leaders.

Keep pricing agile and understandable

One of the biggest tensions in UBP today is just how dynamic a pricing model should be. Some companies frequently adjust pricing to keep pace with rapid product iteration and improvements. Others worry that frequent changes create confusion and complexity for customers. The group that joined us for this session are at the forefront of iteration—the speed they’re evolving their pricing is almost unheard of, especially in traditional seat-based models, which made quick pivots and iterations nearly impossible.

These companies are constantly balancing between keeping their pricing agile and financially sound while ensuring customers understand their pricing changes. 

It’s clear that cost control and spend predictability are top priorities. Some leaders in the discussion said that instead of getting a monthly usage report, customers need real-time visibility into usage and the tools to help them constrain spend so they don’t overshoot their budgets. They also want better tools to help manage spend in general: think the ability to set thresholds, manage overages, and avoid billing surprises. 

“Our users consume services at really high transaction rates, and they expect they can get insights into that in real time.”

This on-demand visibility often needs to be paired with pricing iterations that are clear and legible from the customer’s point of view. Giving customers this transparency is key—without a clear link between price and value, they’re far more likely to push back on pricing changes.

Key takeaway: Businesses must strike a balance between pricing agility and customer confidence, ensuring that any changes are clearly communicated and justified by the value customers receive.

Build out your billing UX

Billing isn’t just a financial function anymore—it’s a critical part of the product experience and needs to be given as much consideration as other areas of product development. Many of the companies we spoke with are investing in real-time spend visibility, ensuring that customers always know how their usage impacts their bottom line. 

And beyond just surfacing costs to customers, these companies are also thinking about how to frame billing data in a way that reinforces value. As one leader said:

“Whether the customer feels good about the outcome or not dictates their willingness to pay as the end user.” 

It’s your job to frame billing data in terms of value delivered. Instead of just showing raw usage numbers, the businesses that are contextualizing costs for their customers—showing how spend translates to business impact—find that their customers are less price-sensitive and more open to the pricing evolutions businesses need to be able to introduce to stay competitive.

Simple pricing helps adoption, but enterprise customers often need more granular cost control. “Pure usage-based pricing ends up being better for us because customers get unhappy when they get confused,” said one company leader. But, their customers also care deeply about customer line items. Herein lies one of the main challenges, and your mandate is to know your customers deeply so you can deliver the insights and information that’s critical to them.

It’s also clear that customers want customizable billing insights that let them slice and dice data in ways that are relevant to their business. A one-size-fits-all dashboard isn’t enough—different teams (finance, engineering, ops) need different views of the same billing data. There’s a caution here, though: more isn’t always better. One company in the group made the point that sharing billing data isn’t a billing problem; it’s a business value problem. In this leader’s experience, showing customers simple prices and numbers elicits a kneejerk negative reaction—the price will always seem too high. This leader was more excited to display more business value in the billing UI—not just showing more data, overall. 

Key takeaway: Companies that invest in real-time transparency, value framing, and flexible billing insights will stand out in a crowded, competitive market.

Make billing data a growth lever

UBP is also a goldmine of data for internal teams. Many of these companies are increasingly treating billing as a strategic data source that informs product decisions, tracks customer health, and assists in refining pricing models.

As customers continue to use and adopt new products, usage data becomes increasingly advantageous. “It starts to surface different use cases in large customer spend as you dig into it,” said one company leader. These insights allow the company to dynamically allocate business resources to maximize efficiencies and business goals. 

Billing data and insights can also be leveraged to make sales teams more effective. One company focused on putting together a 360 usage dashboard for their sales team. “Sellers love this because it empowers them in their sales conversations,” the leader said. 

The real-time usage patterns available with a UBP model can be critical for some business types to forecast revenue and guide product iteration. The ability to see demand shifts as they happen in real time enables faster decision-making and more accurate financial planning. It can be important to take revenue numbers with a grain of salt, though.

“If product adoption is strong, but the revenue isn’t great, we actually don’t care. We can always dial in pricing, but we can’t dial in adoption.” 

Another leader pointed out that while billing data is critical, using it as a sole indicator of the health of a customer or account isn’t enough. 

“In some cases, customer revenue might be steady or growing, but when you put it in the context of the contract or deal, it turns out the billing data was masking problems.” This is what you might expect to see if customers have a minimum commitment: revenue might be steady, but usage could be dropping. And this is where your billing and usage data can illuminate “bad” deals or customers who are on a churn trajectory.

Because billing data ownership is often split between engineering and finance, alignment is critical. We heard from the group that engineering teams often own the raw usage tracking, while finance translates that data into revenue records and customer invoices. Companies that tightly align these teams have a competitive advantage in both accuracy and agility.

Key takeaway: Integrating billing data into your growth strategy—across product, finance, and sales—can optimize pricing and customer engagement more effectively.

The future of UBP

Looking ahead, these leading companies are looking to gain clarity on how best to function under a UBP model and are investing in new ways to make UBP more efficient, predictable, and valuable for customers. Some of their top areas of investment shouldn’t be a surprise—these are developments we’ve worked on closely with many of our customers and the demand for the outcomes they promise continues to grow.

Running a UBP business 

Businesses operating UBP models simply cannot function like those that don’t. These companies—and any that are looking to adopt UBP—continuously explore how to price better, how to better align product features with pricing, how to effectively adjust their sales processes and incentives to match UBP goals, and on and on. The transformation that UBP requires is ongoing and requires deep consideration and thoughtful implementation. What constitutes “best practices” here is an area of ongoing learning, and there’s not yet a cut-and-dried playbook you can follow.

Billing data customizability

Customers want and need more control over spend thresholds, real-time billing alerts, granular invoice breakdowns, and automated fraud detection. One leader in the group described their customers’ needs as “a billing model on top of a billing model.” As the company introduces new products or efficiencies, their customers likely need to have access to multi-organization billing and hierarchies—just one more layer on this already-complex billing ecosystem.

AI and ML for billing optimization

Some of these businesses are starting to explore AI/ML-driven spend projections and automated insights to help customers manage costs proactively. These same efforts can be used to automate insights for use by internal teams like sales, finance, and product. Companies told us that some of the work required to generate this type of insight is already being done manually, and being able to automate that work is one area that would free up significant time and headcount in already resource-strapped organizations.

Key takeaway: The next wave of UBP innovation will focus on intelligent automation, enhanced customer controls, and deeper financial insights to help businesses and their customers manage pricing with confidence.

Final Thoughts

We’ve said it before, and we’ll keep saying it: UBP isn’t just a revenue model—it’s a product experience, a financial strategy, and a growth enabler. Companies leading the charge in UBP are prioritizing pricing transparency, real-time billing visibility, and customer empowerment.

As we move forward, businesses that invest in clear value communication, data-driven billing insights, and adaptive pricing strategies will continue to set the standard.

Interested in learning more about best practices and pricing strategies for adopting and implementing usage-based pricing? Let’s talk.