Usage-based pricing is a pricing model where customers pay based on how much they use a product rather than paying a flat subscription fee. Usage can be measured in many ways: number of users, API calls, templates created, emails sent, or other product-specific units. Usage-based pricing can align price with value, but it requires reliable tracking and transparent reporting.
Why Usage Pricing Works in SaaS
Usage pricing is common in SaaS because it scales with customer growth. It can reduce barriers to entry by letting customers start small and pay more as they expand. Many B2B buyers prefer usage models when they can predict costs, which is why it is frequently used in B2B SaaS contexts. But the model succeeds only if customers trust the numbers.
Metering, Billing, and Operational Requirements
Usage pricing requires accurate metering and a reliable billing integration. You need clear definitions of what is billable, how usage is counted, and when it resets. You also need monitoring for anomalies. If metering breaks, you can undercharge or overcharge, both of which are harmful. This is why monitoring is part of pricing infrastructure, not only application infrastructure.
Onboarding and Cost Transparency
Usage pricing can confuse customers if it feels unpredictable. Make pricing and usage visible early in the product. Good self serve onboarding reduces churn by helping customers understand how to get value without unexpected charges. Provide usage dashboards, alerts, and documentation. If you price based on a feature like email templates, explain what counts and how customers can manage usage through workflows and permissions.
Usage-Based Pricing and Topol
Topol helps SaaS teams embed email editing features with predictable workflows and clean integration patterns, making it easier to define and measure usage units if you choose to price based on templates or editor activity. Learn more at Topol or create an account at Topol signup.