B2B SaaS Pricing Models Explained (And How to Pick One)

The pricing model is not just how you charge - it's a signal about who you're for and how your product creates value. A per-seat model says "this is used by individuals." A usage-based model says "pay for what you get." Picking the wrong model loses revenue even when the price point is right.

SaaS companies that align their pricing model to their primary value metric grow 38% faster than those using flat-rate pricing for usage-driven products. The model matters as much as the number.

Why this happens

Most early-stage SaaS founders pick a pricing model by copying their closest competitor or defaulting to flat-rate because it's simple to explain. Neither approach starts with the question that actually matters: what unit of output does my buyer care about most?

If a buyer cares about individual productivity, per-seat makes sense - value scales with headcount. If a buyer cares about volume of output, usage-based makes sense - value scales with consumption. Flat-rate pricing makes sense when differentiation is about features, not volume. Freemium makes sense only when there's an engineering path from free behavior to paid behavior, and a clear activation trigger.

Using the wrong model means leaving revenue behind at the top or creating friction at the bottom. Per-seat pricing for a usage-driven product caps your revenue from your best customers. Flat-rate pricing for an individual productivity tool gives away margin to your highest-usage accounts.

What to check first

Before settling on a model, work through these diagnostic questions:

What is the primary value metric - the unit your buyer measures success in? Users, records, messages, documents, API calls, hours saved? Name it. Your pricing model should scale in the same direction.
Does value scale with the number of people using the product, or with the volume of output? If value grows as more team members use it, per-seat. If value grows as more processing happens, usage-based.
Can you build an activation path from free to paid? Freemium only works if there's a moment where the free user hits a limit or unlocks a feature that's worth paying for. If you can't name that moment, freemium becomes a support burden, not a growth engine.
What is the cost to serve an additional unit? Usage-based pricing requires knowing your margin at scale. If serving a high-usage customer costs significantly more than a low-usage one, flat-rate or per-seat pricing transfers that risk to you.

How to fix it

Here's how each of the four models behaves in practice:

Flat-rate - one price for all features and all users. Simple to sell, simple to explain, simple to forecast. The downside: you can't capture more revenue from customers who get more value. Works best for products where all customers have similar usage patterns and the value proposition is about features, not scale.

Per-seat - price scales with the number of users. Predictable for buyers and sellers, easy to forecast, straightforward to contract. Works best for tools where individual people use it daily - CRMs, project management, communication tools. The ceiling risk: buyers cap seats to control costs, which limits expansion revenue.

Usage-based - price scales with consumption. Aligns your revenue with the value you deliver. High-usage customers pay more because they're getting more. Creates natural land-and-expand motion. The downside: revenue is variable, which complicates forecasting and makes it harder to close enterprise contracts with procurement teams who need fixed costs.

Freemium - a free tier designed to convert to paid. High volume at the top of the funnel. Works when the free-to-paid conversion path is engineered with precision - a specific action, a specific limit, a specific feature gate. Without that engineering, freemium generates trial users who never convert and support tickets that cost more than the revenue they generate.

The selection rule: identify your primary value metric, then pick the model that scales in the same direction. When you're uncertain, test two models with different customer segments and measure conversion rate and expansion revenue against each.

Remove the guesswork

Picking a pricing model without knowing how real buyers respond to each option is a guess. RightPrice runs your pricing structure through 100+ synthetic buyer interactions and returns a confidence score, optimal price range, and trial strategy recommendation - so you can validate the model before you commit it to contracts and billing systems.

Validate your pricing model with RightPrice