kellblog.com · 2022-10-13 · 1330d

Adapting SaaS Metrics for Usage-Based and Monthly Pricing Models

Dave Kellogg explores how traditional SaaS metrics like MRR and ARR must be reconceptualized in usage-based and month-to-month pricing models. He argues that 'recur' never meant contractual commitment, but rather revenue that has the potential to repeat, and proposes using trailing spend calculations instead of trying to force monthly allocations in variable pricing environments.

6 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

1Q22 Customer A Spend

255$

actual quarterly

15 credits at $17 per credit

2Q22 Customer A Spend

289$

actual quarterly

34 credits consumed

Churn Rate (Sample)

19%

hypothetical contraction scenario

if spend contracted from $289 to $234

Credit Price per Unit

17-20$

range with volume discounts

usage-based bar model with 20+ credit discount

Net Expansion Rate (Sample)

124%

year-over-year comparison 2Q21 to 2Q22

includes 4 unit growth plus $17 vs $18 per-unit price improvement

Sample Customer Martini Spend

52credits/year

annual contract value

illustrative usage-based pricing example