Growth tacticS

Unlock Growth with Usage-Based Pricing

Revenue

Grow your MRR with usage-based pricing, where customers pay more as they use your product more.

Unlock Growth with Usage-Based Pricing

Usage-based pricing is a great way to unlock growth for your business. Instead of having 3-4 flat rate pricing plans based on features, you charge based on usage. This could be a percentage of the charges you process, the number of email subscribers you have, or the number of emails you send per month. With a usage or value-based pricing model, customer expansion is baked right into your product. The more your customers use your product (or the more they grow), the more they pay. A great example of this is EmailOctopus. Their pricing is based on the number of email subscribers you have. According to their Marketing Manager, Hollie Youlden, customer expansions accounted for 47% of new revenue and 9.48% of their MRR last month! Since their pricing is usage based, the expansion happens almost automatically. Usage-based pricing is a great way to unlock growth for your business. It encourages customers to use your product more, and as they do, they pay more. This is a great way to increase your MRR and grow your business.

How to implement
  1. Identify what usage metric you want to base your pricing on. This could be a percentage of the charges you process, the number of email subscribers you have, or the number of emails you send per month.

  1. Create a pricing structure based on the usage metric you identified. Make sure to include different tiers so that customers can upgrade as their usage increases.

  1. Promote your usage-based pricing to your customers. Make sure to emphasize the benefits of using your product more and how they can upgrade as their usage increases.

  1. Monitor your customer usage and revenue to see how your usage-based pricing is performing.

  1. Make adjustments to your pricing structure as needed.