Introduction

Pricing is one of the most critical challenges early-stage SaaS startups face. Choosing the right pricing model can impact customer acquisition, retention, and long-term revenue growth. With so many pricing options available, startups often struggle to decide which approach aligns best with their product, market, and business goals.

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This guide provides a deep dive into the most effective SaaS pricing models, including their pros, cons, real-world examples, and downloadable order templates to help you implement them in your business.

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At Salesbricks, we talk to B2B SaaS startups every day about pricing, packaging, and providing the platform to help close deals faster. We understand that pricing isn’t just about selecting a number—it’s about creating a strategy that attracts customers, maximizes revenue, and supports long-term growth.

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Below, we break down the key pricing models that successful SaaS companies use, along with order templates to help you implement them in your own business.

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1. AI Usage-Based Pricing

Overview

Usage-based pricing, often called pay-as-you-go (PAYGO) or performance-based billing, charges customers based on how much they use a service. This model is particularly popular in AI-driven SaaS, API services, and cloud computing, where computing resources are consumed dynamically.

Pros

• Aligns cost with value – Customers only pay for what they use, making it attractive for cost-conscious buyers.
• Encourages easy adoption – No high upfront costs mean users can start small and scale as needed.
• Scales with customer growth – As customers grow and use more, revenue increases naturally.

Cons

• Revenue unpredictability – Fluctuating usage can make forecasting revenue difficult.
• Hard to estimate costs – Customers may struggle to predict their monthly bill, leading to hesitation in committing.

Common Examples

• OpenAI API – Charged per token usage for AI-driven applications.
• AWS – Serverless compute, billed per execution time.
• Google Cloud AI – Billed based on AI model queries and computing resource.

Order Template

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2. Subscription-Based Pricing

Overview

A traditional and widely adopted model, subscription-based pricing involves charging customers a recurring fee (monthly, quarterly, or annually) for continued access to a product. This model ensures predictable revenue and encourages long-term customer relationships.

Pros

• Predictable revenue – Subscription renewals provide consistent cash flow.
• Simple for customers to understand – Fixed costs make budgeting easier.
• Encourages retention – Long-term contracts lead to lower churn and increased lifetime value.

Cons

• Fixed fees may not align with usage – Some customers may pay for features they rarely use.
• Risk of churn – If customers don’t see continuous value, they may cancel before renewal.

Common Examples

• Zoom – Monthly or annual subscription plans for video conferencing.
• Slack – Per-user, per-month subscription for team communication.
• Salesforce – Enterprise software with tiered subscription pricing.

Order Template

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3. Subscription & Usage-Based Billing (Hybrid)

Overview

A combination of subscription and usage-based models, hybrid billing charges a base subscription fee with additional fees based on usage. This approach balances predictable revenue with scalable pricing that grows alongside customer usage.

Pros

• Balances predictability and flexibility – Ensures a stable revenue stream while allowing for scalable growth.
• Encourages enterprise adoption – Many large customers prefer a fixed baseline with usage-based adjustments.

Cons

• Complex pricing structures – Customers may find it harder to understand billing.
• Risk of unexpected costs – Users exceeding their base usage may be surprised by higher bills.

Common Examples

• Snowflake – Charges for base storage with additional fees for compute usage.
• Twilio – Monthly subscription plus pay-as-you-go SMS and API pricing.

Order Template

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This guide is designed to help SaaS founders choose the right pricing model for their business. Each model has unique benefits and challenges, and the key to success is aligning pricing with customer expectations and product value. If you're still unsure which approach is right for your startup, explore our detailed pricing templates to see real-world contract structures and billing setups.

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