Usage-based pricing models are most common in SaaS platforms that automate some action or store some type of data and expect high volumes of them from their users. Examples are API requests to an external API, or metrics pings to store some type of high interval data.
Before we begin you should decide if your product or service will be using a monthly or yearly pricing strategy. Meaning will you be charging your users once a month or once a year and using the period as the limit for rolling over leftover credits, etc.
<aside class="callout">💡 This is only for a SKU’s pricing and not it’s billing. RevOps provides a Billing Frequency term to allow you to bill customers at a different interval than your pricing.</aside>
To create a Usage-based priced SKU, you need to start by going to the SKUs settings page (Hover on Settings, click the 1st item in the list, SKUs).
Once there, create a new SKU using the Create SKU button. In the Create New SKU modal, from the Select a pricing model dropdown, select Usage.
Fill in all relevant information for your SKU. The SKU Name will be used only within RevOps while the Line Item Title will be what your customer sees. Update the Unit Name to something like “api requests” or “pings”. Include any specifying language in the Description field, like how burst pricing works, what rate limits are set to, or how the customer will be billed for the SKU.
Once done filling in information on the Product Info tab, continue on to the Pricing tab and confirm your List Price, Currency, and that the Unit Pricing Schedule is set to “Usage”.
Now it’s time to set up your Usage tiers.
You will find the Configure Usage-based SKU Usage Model section. Within it you’ll find the Assign Quantity and Pricing to your Rates section. We won’t be covering the “product metering configuration”, “Add Product Metric”, or “Advanced Options” sections, they can safely be ignored.
If you only have 1 pricing tier, simply set the Quantity, Rate Per Unit, and Monthly Fee values for that tier and skip to 4. Save the SKU. If you have multiple tiers, you can add more.
Continue adjusting the maximum Quantity value to be less than “Infinity” until you have set up your line item’s tiering schedule.
After you’re happy with how you’ve set up your SKU, scroll to the bottom of the page, and click the Save button in the bottom right corner.
When quoting, click the Add SKUs button to create a new line item with your new metered priced SKU.
For display purposes, you might want this line item in its own pricing table so you can include special terms on how metered products will be handled in specific scenarios.
Now, our customers can see the extra rates they would be invoiced if they've surpassed the original quantities purchased.