5 In fact, public companies that use consumption- based pricing are experiencing 38% faster revenue growth over their SaaS peers and 50% higher revenue multiples, based on research from OpenView.¹ These public companies are also valued at a revenue multiple of 24.8x vs. 17.7x over SaaS peers by the public markets, according to findings by Sapphire. 2 Not surprisingly, growth in consumption encourages customer retention as well. In the OpenView study, top-quartile net dollar retention for providers with usage-based pricing is 120%, compared to 110% for the broader SaaS index.³ From an operational perspective, consumption- based pricing enables SaaS providers to scale business models with agility and simplicity. That’s because consumption-based pricing does not include complicating factors around user types, roles, or subscription tiers. SaaS providers choose a value metric that equates to a price per unit and then charge based on usage—regardless of the user. Perhaps most importantly, consumption-based pricing compels SaaS providers to better understand customers’ behavior and usage patterns. Through metering, you benefit from a continuous flow of data that illuminates each customer’s behavior in real time. This data gives your sales reps the ability to have in-depth conversations with each customer about how they’re using the product and which new use cases might make sense. Product and Engineering teams can discover, prioritize, and build product enhancements that match actual usage and need. In summary, a consumption-based pricing model aligns cost to value. It allows customers to take a value-based approach to buying solutions, and enables SaaS providers to demonstrate a commitment to their customers’ success. Ready to get started? CHAMPION GUIDES