Usage-based pricing

Usage-based pricing focuses on how much of the product or service the customer uses.

The more the customer uses the product the greater the price they will pay.

To apply usage-based pricing to your product, identify your value metric and then assign a price to it.  

Those using the service at a high volume may look for alternative solutions as the cost may grow too high.

To increase the usage of the product, consider the following:

Make it easy for customers to access and use.

Make the pricing simple and transparent.

Offer several levels of service to accommodate the small user as well as the large one.

Offer a lower per-unit rate if the monthly usage goes above a threshold.

Offer premium services to customers whose usage goes above the threshold.

Usage pricing is a good way to price the product as the price to value is clear to the customer.

 

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