Pricing Levers - Elevate Your Usage-Based Pricing Strategy

Pricing metric

Usage-based

Input and Output Tokens

from OpenAI.com

Product-led growth

Product-led sales

Sales-led growth

Pricing metric

Outcome-based

Per resolved user query

from intercom.com

Product-led growth

Product-led sales

Sales-led growth

Pricing metric

Seat-based

Per user, per month

from atlassian.com

Product-led growth

Product-led sales

Sales-led growth

Pricing metric

Hybrid

Developer seats (seat-based)

Successful models built (usage-based)

from getdbt.com

Pricing metric

Product-led growth

Product-led sales

Sales-led growth

Pricing metric

Fixed

Flat monthly fee for unlimited users and projects

from basecamp.com

Pricing metric

Product-led growth

Product-led sales

Sales-led growth

Pricing structure

Flat rate

Product-led growth

Product-led sales

Pricing structure

T-shirt sizing

Product-led growth

Product-led sales

Pricing structure

Tiered

Multiple price points based on a single primary dimension, such as product features or usage volume. Prices are set within a specific tier. Each tier has a fixed price per unit and applies only to units within that tier.

Tiered pricing is often confused with volume pricing (also known as bulk pricing), yet they differ in discount application.

Volume pricing: Discounts apply retroactively to all units once a threshold is reached. For example, buying 200 units at a threshold of 100 units drops the price to $0.08 per unit for all 200 units, not just those over 100. Volume pricing can create sudden cost drops with small usage changes, making forecasting harder and potentially confusing customers.
Tiered pricing: Discounts apply only to units within each tier, creating a smoother price progression that’s better suited for usage-based models.

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Example:

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Product-led sales

Sales-led growth

Pricing structure

Dimensional

Product-led growth

Product-led sales

Sales-led growth

Pricing structure

Commercial model

Pay As You Go (PAYGO)

Product-led growth

Commercial model

Product-led sales

Commercial model

Prepaid credits

Customers purchase prepaid credits in bulk up-front, receiving a discounted per-unit rate or price for the credits. There is usually a minimum purchase amount, and discounts may vary based on how much is purchased.

Customers can make these purchases through self-serve workflows, with pre-approved, commit-based discounts built in.
Prepaid units often have an expiration date, and unused credits typically do not roll over or get refunded after they expire.
As the service is used, the prepaid balance decreases accordingly.
Many companies implement an auto-refill mechanism: when the balance reaches a low threshold, the customer is automatically charged to top up the prepaid balance. If the top-up is unsuccessful, access to the service may be suspended.
If customers deplete their credit balance, they may be charged at an overage rate and revert to a pay-as-you-go payment model.
This model allows companies to secure payment up front, providing strong protection against fraud.

Product-led growth

Product-led sales

Commercial model

Monthly minimum spend

Commercial model

Product-led growth

Product-led sales

Commercial model

Prepaid commit model

The customer commits to a specific spend or usage over a defined period, typically annually or multi-year. These contracts are negotiated based on anticipated usage, providing spending predictability that aligns with customers' budget planning.

Key negotiable terms include:

Payment schedule: Since customers may not have the budget to pay the full amount up front, companies often need to offer flexible payment schedules, allowing the total payment to be split into several installments with flexible due dates.
Commit access schedule: Paired with the payment schedule, this determines how much of the committed balance customers can access before full payment is made. Allowing full access without full payment introduces the risk of non-collection. To mitigate this, companies can choose to align access to the balance with the amount paid.
Eligible products: Specifies which products or services the prepaid commitment covers and their committed rates. For companies with multiple products or packages, discounts and eligible products may vary to maximize revenue and protect margins.
Overage policy: Defines how customers are charged if they deplete their balance before the term ends. Companies may set higher rates for overages compared to committed rates to encourage early renewals with a higher commitment.
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Rollover policy: Specifies how the company handles any unused balance at the end of the term. This is crucial for customers who may overestimate their spend due to longer ramp-up times or product adoption issues. Underspending can lead to churn risk, so offering favorable rollover policies becomes a useful negotiation lever for customer retention.

Product-led sales

Sales-led growth

Commercial model

Postpaid commit model

The customer commits to a specific spend or usage over a defined period but doesn't need to pay up front. Instead, customers are invoiced based on their actual consumption in arrears at the end of each billing cycle. If the customer does not meet their spending commitment by the end of the term, they will be invoiced a true-up charge for the difference between their actual spending and the committed amount.

This model is more attractive to customers as they don't need to pay up front. They are billed for their actual usage at the end of each billing cycle—similar to a pay-as-you-go model—but receive better discounts due to their spend commitment.
In a postpaid model, collecting the true-up fees can be challenging. Customers might choose not to renew and may refuse to pay the true-up, increasing the risk of non-payment.
Companies may offer larger discounts with prepaid commitments and smaller discounts with postpaid commitments to incentivize up-front payment and mitigate financial risk.‍
Companies may reserve the postpaid commit model for large enterprise customers where there is greater confidence in payment collection due to established relationships and creditworthiness.

Product-led sales

Sales-led growth

Commercial model

Multi-bucket commit model

The multi-bucket commit model is a flexible commitment approach that accommodates customers with varied needs across different products, services, or usage categories. Instead of committing to a single overall spend, customers allocate their commitment into multiple "buckets," each representing a specific product, service, or usage type.

Customers make separate spending commitments for different products or services, and each bucket can have its own terms, rates, and discount structures. Companies can offer different discount levels to different buckets, helping to protect their profit margins.
Usage is tracked individually for each bucket, allowing for precise management of commitments.
Overages and rollovers are managed separately for each bucket. However, customers may overcommit in some buckets and underutilize them, leading to wasted spend. Companies need to manage the risk of imbalance and tailor their policies during contract negotiations to meet customer needs.

Sales-led growth

Commercial model

Enterprise agreement

The enterprise agreement is a long-term contract framework used by large organizations to define the terms for deploying and managing multiple software services at scale. These agreements standardize pricing, usage rights, support, and compliance across the organization. Common pricing terms in enterprise agreements include:

Monetary commitment: Many enterprise agreements require a minimum spend commitment, often prepaid, where enterprises agree to a baseline spending amount over the contract term. This secures discounted rates and supports budget predictability.
Volume-based or enterprise-wide discount: Enterprises often negotiate significant volume discounts or fixed unit rates for organization-wide usage, which helps manage costs in high-usage environments.
Multi-year commitments with price protection: Multi-year contracts frequently come with locked pricing to shield enterprises from price increases over time, ensuring cost stability throughout the contract.
Flexible payment options: Customizable billing schedules, such as quarterly or semi-annual payments, align with enterprise cash flow needs. Some organizations may request deferred or post-paid billing structures to match actual usage.‍
Bundled service discounts: Additional discounts are typically available for enterprises purchasing bundled products or services, optimizing procurement and enhancing overall cost-effectiveness.

Commercial model

Sales-led growth

Incentives

Time-limited trial

Product-led growth

Product-led sales

Incentives

Freemium

Incentives

Product-led growth

Product-led sales

Incentives

Promotional discounts

Product-led sales

Sales-led growth

Incentives

Commit-based discounts

Incentives

Product-led sales

Product-led growth

Sales-led growth

Incentives

Product-specific credits

Incentives

Product-led growth

Product-led sales

Sales-led growth

Enterprise support

Included basic support

Basic support included with all paid plans

from Slack.com

Enterprise support

Product-led growth

Enterprise support

Percentage of software fee

Product-led sales

Sales-led growth

Enterprise support

Consumption-based support

Support is charged monthly based on either a set percentage of total monthly usage or the minimum support plan fee, whichever is greater

from mongodb.com

Product-led sales

Sales-led growth

Enterprise support

Professional services

Professional services are typically charged as a one-time fee, hourly rates, or milestone payments, based on the scope of work. They are often included in the same contract as the product but billed separately from recurring charges, with clear terms for duration and deliverables. Typical pricing models include:

Hourly or time-based billing: Customers are billed based on the actual hours or time spent on their project.
Project-based or fixed-fee pricing: A fixed price is set for the entire project, regardless of time spent, providing cost predictability for customers.
Retainer + overage: Customers pay a recurring retainer fee for a set level of service, with additional work billed as overages at a predetermined rate. ‍
Performance-based pricing: Payment is tied to achieving specific goals or milestones.

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Sales-led growth

Enterprise support

Elevate your usage-based
pricing strategy

Align pricing with go-to-market strategies to match how you reach, sell to, and deliver value to target customers

Product-led growth

Product-led sales

Sales-led growth

Input and Output Tokens

Per resolved user query

Per user, per month

Developer seats (seat-based)

Successful models built (usage-based)

Flat monthly fee for unlimited users and projects

Basic support included with all paid plans

Support is charged monthly based on either a set percentage of total monthly usage or the minimum support plan fee, whichever is greater

Companies accelerate
their revenue with Metronome

Build without boundaries

Learn how Metronome works with in-depth guides and docs.

Stay up to date on pricing insights and trends.

Explore how we connect with your existing tech stack.

Elevate your usage-based pricing strategy

Input and Output Tokens

Per resolved user query

Per user, per month

Developer seats (seat-based)

Successful models built (usage-based)

Flat monthly fee for unlimited users and projects

Basic support included with all paid plans

Support is charged monthly based on either a set percentage of total monthly usage or the minimum support plan fee, whichever is greater

Companies accelerate their revenue with Metronome

Build without boundaries

Learn how Metronome works with in-depth guides and docs.

Stay up to date on pricing insights and trends.

Explore how we connect with your existing tech stack.

Elevate your usage-based
pricing strategy

Companies accelerate
their revenue with Metronome