6 Questions To Ask Before Adopting Usage-Based Pricing

Companies with usage-based pricing. Source: Kyle Poyar at TechCrunch
  • An important part of usage-based pricing is the pricing axis. A good axis will have the following properties:
  • ____ Customers should experience more value if their usage increases.
  • ____ If customers throttle usage, they should experience a decrease in value.
  • ____ If customers throttle usage, it should not go against the growth strategy of the company.
  • ____ Customers should be able to predict their future usage.
  • ____ The axis should be of sufficiently large scale, preferably tens of thousands of units.
  • Has your buyer bought usage-based software in the past?

Question #1: Does value increase with usage?

Question #2: If the customer throttles usage, is the value reduced?

Question #3: If the customer throttles usage, is that ok for your strategy?

Question #4: Is usage predictable for the customer?

Question #5: Is the pricing axis large-scale?

Question #6: Is your buyer used to buying by usage?

Summary

--

--

--

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

SourceLess Airdrop CAMPAIGN IS OPEN NOW

For Non-Programmers: An Idea from Programming!

Software Development Life Cycle

Weeks 1–4: The Front End

Are You in the Right Generation as a Developer?

Sorting and Squaring an Array

Hello Devs! We’re Nosana

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Adil Aijaz

Adil Aijaz

More from Medium

10 Questions to Ask your Real Estate Agent Before Hiring Them (For Buyers)

What if things could have been different?

How I ended up making a Lucky Draw Systemusing Python…..

How is Africa Dealing With Sanitizing Water?