Usage-Based Billing
Usage-Based Billing charges customers based on the extent to which they use a service. In SaaS, this can include metrics like API calls, number of users, or amount of data processed.
This model aligns pricing with consumption, offering flexibility and scalability for customers. It can incentivize efficient usage but requires accurate tracking and transparent reporting to manage effectively.
Explore further
Churn Rate
Annual Recurring Revenue (ARR)
Lifetime Value (LTV)
Customer Retention Rate
Freemium Model