Benefits of Implementing Usage-Based Pricing for SaaS

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Real-world usage-based pricing examples prove time and time again how SaaS companies that implement this pricing model outperform their competitors. In fact, research from OpenView Partners found that usage-based SaaS businesses experience continued growth at scale (29.9% vs. 21.7%) and are driven by best-in-class retention (120% vs. 110%). However, rising above the competition requires more than a “me-too” approach.

With so many vendors implementing Usage Based Pricing (UBP), let's take a look at some of the benefits this pricing strategy provides:

Lowers the barrier to entry : Customers can adopt products or services at minimal cost and increase their usage as needed, expanding the business's target market.
Increases Revenue Potential : As product and service demands increase, SaaS companies have a natural path to upgrade to take customers to the next level.
Increases customer retention : Because customers greece mobile database have more control over their spending, they are less likely to cancel their subscription.
Improves Customer Satisfaction : By offering a pricing structure that easily adapts to changing customer needs, it provides the transparency that customers seek by eliminating the feeling that they are paying for unnecessary/unused features or functionality.
Increases Investor Appeal : While there are several reasons why UBP is attractive to investors, the main ones are its ability to increase customer lifetime value (CLV) and reduce churn rates.