Pricing Models

Usage-Based Pricing

A pricing model where customers pay based on how much they consume — API calls, messages sent, records processed, or similar units.

Usage-based pricing aligns what customers pay with the value they receive, lowering the barrier to adoption since customers can start small and scale their spend as value grows. This creates strong natural expansion revenue — as a customer's business grows, their usage and payment grow automatically. The tradeoff is revenue predictability: usage-based businesses have inherently variable MRR, which complicates forecasting and financing. Sales and support teams also need to communicate a price that varies monthly, which can cause friction during procurement. The best usage-based models combine a base subscription (for predictability) with usage-based components (for alignment). API businesses, data platforms, and communications tools are the most common categories that succeed with pure usage-based pricing.