Proprietary and Confidential ©2021 OpenView Advisors, LLC. All Rights Reserved
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The Usage-Based
Pricing Playbook
Kyle Poyar and Sanjiv Kalevar — January 2021
Proprietary and Confidential ©2021 OpenView Advisors, LLC. All Rights Reserved
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Key questions we’ll answer:
• Why are SaaS companies increasingly adopting a usage-
based revenue model?
• Which SaaS companies have been successful with a
usage-based revenue model, and how do they behave?
• How can companies overcome GTM and operational
challenges in scaling with a usage-based model?
Findings are backed by multiple sources:
• Conducted 15+ in-depth interviews with GTM and
operations executives at top-performing SaaS companies
that have a usage-based revenue model.
• Analyzed patterns in publicly traded companies.
•
Leveraged OpenView’s proprietary insights from working
directly with usage-based portfolio companies.
We investigated how to grow to $100M+
ARR with a usage-based revenue model
Diverse set of interviewees
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This playbook encompasses multiple flavors
of usage-based revenue generation*
Transactional
Usage-based subscription tiers
Flexible pricing where customers
only pay for what they used
during the period.
*Not mutually exclusive; many companies adopt multiple models for different customer segments
Customers commit to their desired
level of usage. They can upgrade or
pay overages for more usage. If they
need less usage, they can change
plans (subject to contract terms).
Third-party usage
Flexible pricing where customers only pay for
what was used during the period. Usage is not
controlled by the customer, but rather comes from
behavior by a third party (e.g., the customer’s end
customer).
Primary focus of this playbook
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3 takeaways for CEOs, CROs, and CFOs
CEO
CRO
CFO
1. Ensure a usage model is right
for your product. Each use
should generate a positive business
out