November 10, 2021
Kyle Poyar and Sanjiv Kalevar of OpenView Ventures recently published this report - The State of Usage-Based Pricing in 2021.
It is chock-full of insights about how companies are leading with Usage-Based Pricing (UBP).
Some key highlights from approximately 600 SaaS companies that were surveyed:
Let’s talk little bit more about point number #4 -
Unlike traditional subscription pricing, where there was never a need to meter or instrument actual usage (of the product or service) because the money was collected upfront and irrespective of actual usage, in UBP this model is flipped on its head. Money is collected after use (or pay-as-you-go) based on actual usage.
This business model change has a cascading effect into all functional areas of the company.
If you are thinking about shifting to UBP or already on it, you will want to make sure you have both a strategy and tactical measures in place for each of the items outlined above.
Some questions you would want to ask…?
We have been fortunate to have been part of the UBP business model framework outlined above and lessons learnt at AWS.
Connect with us to learn more about the right approach and best practices of shifting to Usage-Based Pricing.