What are the most innovative pricing models for Enterprise Software?

1 Usage-based pricing

Usage-based pricing is a pricing model that charges customers based on how much they use the software, rather than on a fixed or periodic fee. This can be measured by various metrics, such as the number of users, transactions, data, or features. Usage-based pricing can benefit both the software vendor and the customer, as it allows the vendor to capture more value from high-usage customers, and the customer to pay only for what they need and scale their usage as their business grows or changes. Usage-based pricing can also incentivize customers to use the software more frequently and efficiently, and provide more transparency and feedback on their software consumption.

2 Outcome-based pricing

Outcome-based pricing is a pricing model that charges customers based on the value or results that the software delivers, rather than on the features or functions that it provides. This can be based on various outcomes, such as revenue, cost savings, productivity, or customer satisfaction. Outcome-based pricing can create a stronger alignment and partnership between the software vendor and the customer, as it shifts the focus from the software itself to the business problem that it solves. Outcome-based pricing can also reduce the risk and uncertainty for the customer, as they only pay when they achieve the desired outcome, and share the rewards with the vendor.

3 Freemium pricing

Freemium pricing is a pricing model that offers a basic version of the software for free, and charges for additional features, services, or benefits. This can be done by limiting the functionality, capacity, support, or customization of the free version, and offering upgrades or add-ons for a fee. Freemium pricing can help the software vendor to attract and acquire more customers, and to generate word-of-mouth and referrals. Freemium pricing can also help the customer to test and evaluate the software before committing to a purchase, and to access the core value of the software without paying upfront.

4 Subscription pricing

Subscription pricing is a pricing model that charges customers a recurring fee to access the software, usually on a monthly or annual basis. This can include different tiers or plans that offer different levels of features, services, or benefits. Subscription pricing can provide a steady and predictable revenue stream for the software vendor, and reduce the friction and complexity of the sales process. Subscription pricing can also provide more flexibility and convenience for the customer, as they can switch or cancel their subscription at any time, and enjoy continuous updates and support.

5 Pay-as-you-go pricing

Pay-as-you-go pricing is a pricing model that charges customers only when they use the software, rather than on a pre-paid or fixed basis. This can be done by billing customers per unit of time, such as per hour, day, or month, or per unit of service, such as per API call, request, or event. Pay-as-you-go pricing can lower the entry barrier and the upfront cost for the customer, and allow them to adjust their spending according to their demand and budget. Pay-as-you-go pricing can also enable the software vendor to offer more granular and flexible pricing options, and to capture more value from variable or seasonal usage patterns.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?