Extra Crunch Tuesday: Subscription-based pricing is dead: Smart SaaS companies are shifting to usage-based models

Welcome to Extra Crunch Tuesday

Some IT managers may still be debating the merits of usage-based pricing versus subscription-based models, but SaaS investors have made up their minds.

Compared to their rivals, companies that employ usage-based pricing trade at a 50% revenue multiple premium.

You can argue with success, but seven out of the nine IPOs since 2018 with the best net dollar retention offer usage-based models.

If you’re a founder who hopes to break into the $100M ARR club, this guest post will help you identify the right usage metrics for creating a sustainable customer journey.

For more actionable advice regarding SaaS pricing and sales, see these previously published Extra Crunch stories:

• Should your SaaS startup embrace a bottom-up GTM strategy?
• How should SaaS companies deliver and price professional services?

Thanks very much for reading Extra Crunch! I hope you have a great week.

Walter Thompson
Senior Editor, TechCrunch
@yourprotagonist

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