vs. Buildium
AppFolio
Per-unit price and inbound sales to fee managers
- What it did
- Billed by units managed (2009); search, content and events
- Buildium
- Also per unit, but plans published only to 650 units (2007)
Strategy Map›Layer 5 · Go-to-Market Strategy›Monetization Strategy/Who pays, and for what+ from outside the named canon
Usage-Based Pricing
What is Usage-Based Pricing?
The bill follows the customer's own usage or size (servers, workloads, API calls, units or employees under management, messages, compute) and rises without a new negotiation.
How Usage-Based Pricing works
The bill grows with the customer's own use, so expansion needs no new sale; the same terms shrink revenue when customers optimize or struggle.
How companies won with Usage-Based Pricing
From the win chains in Strategy Canon case studies: what the winner did, and what its rival did at the same step.
vs. Practice Fusion
athenahealth
Paid a share of client collections
- What it did
- Fees 2-8% of collections (2007), 'like a merchant processor fee'
- Practice Fusion
- Free to doctors (2009); paid by advertisers, labs and pharma, later an opioid-maker kickback ($145M, 2020)
vs. New Relic
Datadog
Land and expand on per-host pricing
- What it did
- $15 per host, no per-user charge, 14-day trial, month to month (2012-14)
- New Relic
- Free Lite tier plus $200 per server tiers (2008)
vs. Omada Health
Hinge Health
Default MSK vendor, then enroll more members
- What it did
- 4 in 5 digital-MSK employers chose Hinge (2020-22)
- Omada Health
- MSK a late add-on via video PT (2020-21); cross-sells several programs
Also tagged: Anthropic · BigCommerce · Braze · Buildium · Confluent · Cursor · HomeAway · Klaviyo · Navan · New Relic · Omada Health · PayPal · PDF Solutions · Procore Technologies · Reddit · Snowflake · Twilio · Zipcar
The question to ask of a company
What unit does the bill follow, and does it grow with the customer on its own?
Who names it
| Author | What they call it / where it appears |
|---|---|
| OpenView + | Usage-based pricing |
| Patrick Campbell + | Value metric |
| Wardley + | Utility pricing |
Note. Near miss: A fixed annual license sized once at signing. Does not count: Per-seat pricing alone; payment-processing percentages and marketplace commissions (take rates); percentage-of-collections service fees.