You pay for how much you get—this phrase pretty much describes what this method stands for. Companies that offer platform-related services such as Amazon Web Services charge their users a price based on transactions numbers, API request frequency, and gigabytes of data used. Their example resulted in SaaS companies spreading this method towards other areas; for example, accounting companies can be charged based on invoice numbers, media ventures can pay depending on the publications or post numbers, etc. Advantages:
You get a good incentive to improve this product; basically, the better it works, the more revenue you get, and you get to adjust the price based on both parties' performance.
Demand is volatile, so your customers will love paying decreased overheads during quiet months and stay with your product across the entire year.
- SMBs will love your affordability
Attracting them is a great strategy; one day they will become big.
With no fixed price, there won't be users who suck up the unlimited amount of resources to leave the rest with a reduced performance level. Disadvantages:
You can't really forecast the income density when the payments are fluid.
The users may not appreciate unstable expenditures when their invoices will quadruple all of a sudden after they got used to smaller spending.
Stability is often a key factor for SaaS, so it is somewhat contradictory when this premise is overshadowed by constantly fluctuating prices.