Best Practice Report

Best Practices In Executing B2B Usage-Based Pricing Models For Sellers

September 11th, 2023
Seth Marrs, Principal Analyst
Seth Marrs Principal Analyst
With contributors:
Cristina De Martini , Robert Munoz , Anthony McPartlin , Christian Jibilian , Ellen Lind

Summary

Usage-based pricing models are expanding rapidly within B2B software-as-a-service (SaaS) companies while continuing to be the standard in many established high-transaction verticals. Although this model’s advantages make it attractive to companies with products aligned to customer value, its disadvantages disrupt revenue teams used to perpetual or contract pricing. Revenue operations must build a new set of capabilities to support and improve usage-based forecasting and seller optimization, particularly for target setting and reporting. In this report, we review the advantages and disadvantages of usage-based models and offer an alternative approach to forecasting and executing these sales.

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