When to use Per Seat vs. Per Use pricing
Many people think of pricing as monetization, but just as important to think through it as an acquisition strategy.
Here’s a simplified 2x2 matrix to distill some of the ideas we discussed.
- When to use per seat pricing: If your customers demand predictable bills, then per seat pricing is the way to go [...]
- When to use usage based pricing: If your costs are material and scale with usage like Twilio, then usage based pricing aligns your costs with your customers' spend [...]
- A hybrid approach: There are many companies who employ a two-part tariff: a base platform fee and an ongoing usage fee to capture positive aspects of both types of pricing strategies [..]
[See original article for deeper dive]
Most relevant during:
PMF phase
GTM Fit phase
Scale phase
Most relevant for:
ACVs < $15K
ACVs $15K-$50K
ACVs > $50K
