Usage-based pricing is rising, but not replacing other models

Usage-based pricing (UBP) is on the rise — 61% of SaaS companies used this model in some form in 2022, VC firm OpenView found out.

UBP consists of charging based on how the service or product is consumed, not on how many people are using it; that would be the seat-based approach.

But as often in pricing, things are more blurred, and many companies are actually using blended models. Think of Zapier, for example: It offers subscription tiers that include consumption as one of its main variables.

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That blending is one of the key findings of OpenView’s State of Usage-Based Pricing report: “It’s not usage-based or subscription pricing. Today SaaS companies are turning to more complex, hybrid models,” the authors wrote.

Now in its second edition, the firm’s report is based on responses collected between July and August 2022 from private SaaS companies. That was a few months ago, so the data may be lagging a bit, but it still reflects the new spirit in which founders find themselves.

Usage-based pricing is rising, but not replacing other models by Anna Heim originally published on TechCrunch