Modernize Your Pricing: When And How To Layer In Usage-Based Pricing

Enterprise software-as-a-service (SaaS) companies are increasingly adding consumption- or usage-based pricing (UBP) elements to their pricing models. This approach aligns the price paid to actual usage (e.g., queries, API calls, emails) and promises to better align price with value, among other benefits. The rapid emergence of generative AI (genAI) — and its high variable costs — has hastened this trend. Organizations should take care when creating a new pricing model and should solicit input from customers, stakeholders, and internal teams. In this report, we provide a step-by-step process for moving to a consumption- or usage-based pricing model — in whole or in part.