Choosing the Right Pricing Metric for Your SaaS Product

Your pricing metric, the unit you charge for, is one of the biggest pricing decisions you will make. The right metric aligns your revenue with the value your customer receives, grows naturally as customers succeed, and feels fair to both sides. The wrong metric gets in the way, penalizes adoption, and means you are charging for the wrong thing.

What is a pricing metric?

A pricing metric is the “per what” in your pricing. Per user. Per transaction. Per API call. Per gigabyte. Per device. This is not the same as your pricing model (subscription vs. usage-based vs. hybrid). The model is the structure. The metric is the unit within that structure.

Your metric defines the fundamental relationship between what customers do with your product and what they pay. Get it right, and your pricing scales naturally with customer success. Get it wrong, and it quietly caps your revenue or quietly kills adoption.

Why per-user pricing is a red flag

Per-user (or per-seat) pricing is the most common SaaS pricing metric. It is also the laziest, and usually the worst fit.

It penalizes adoption. Every new user costs more money. I have seen companies where the admin gatekeeps access to the SaaS tool because every new seat costs money. The product delivers value, but the pricing metric prevents the organization from realizing it.

It does not correlate with value for most products. A product management tool with 10 users and one with 100 users might deliver exactly the same value if both teams are shipping the same product. And it caps your revenue per account. Once every relevant person has a seat, your revenue from that account stops growing, even as usage deepens and they’re getting more value.

There are exceptions. If each user genuinely gets distinct, individual value, like a personal productivity tool or a sales prospecting platform where value is per-salesperson, per-user can work. But for collaborative tools, platforms, and infrastructure products, it is almost always the wrong metric.

The real challenge: finding your metric

The alternative is to find a metric that reflects the value the organization extracts, not the number of people who access the tool. That might be projects managed, data processed, integrations active, or outcomes achieved. A good metric aligns with value, is easy to understand, grows with customer success, is hard to game, and does not make it harder to get adopted.

Choosing well requires understanding your value chain, your customer segments, and the job your product is hired to do. Generic advice only gets you so far, because the right metric for a monitoring platform is fundamentally different from the right metric for a document management system.

In my upcoming book, Pricing from the Core, I walk through the full framework for evaluating and selecting pricing metrics, including the specific criteria, the trade-offs, and the validation methods I use with clients. If you want to be notified when it launches, get in touch.