Usage-Based Pricing: Is it Obsolete Yet?

Angie oversees Cazoomi's operations. She enjoys traveling, loves dogs, is a 1% Pledge supporter, and a start-up entrepreneur with investments in several APAC startups. 6 minute read

Look into almost any SaaS platform, and you’ll see that the pricing is usage-based. This differs from business model to business model: some charge per “seat” or the number of users, others for the features you use, and others for the number of leads you add to their systems.

But it’s essentially the same: you pay as you grow.

In theory, this is a good model: you start small, even on a free tier — it’s a great way to support a budding business. Then, as you grow, it’s implied you have more money to spend on your tech stack, so your subscription increases as well.

But is this model good for everyone? Let’s see!

Usage-Based Pricing: The Good

Have you ever wanted to test a business idea before you go all in but realized you need too big a budget to get it off the ground? Usage-based pricing helps.

Most SaaS companies (ConvertKit, Stripe, Mailchimp, and so on) will let you use their platform (with limited capabilities) for free — until you get some wind under your wings. 

Image via ValueShips

Almost all the big players in the SaaS industry are there. And they constantly come up with new ways to offer “flexible” pricing:

Image via ValueShips

The best part about this model is how fast a company can grow. By attracting users in the bootstrapping phase and sticking with them until “they make it big”, your SaaS grows along with them.

In fact, public SaaS companies scale the fastest when they adopt a usage-based pricing model:

Image via TechCrunch

If it’s good for everyone and everyone grows at the same pace, why do we even bring it up? Well, because things are a tad murkier than you might think.

Usage-Based Pricing: The Bad

Remember how giddy you get when you find a new SaaS solution with a ton of features that seem to be the answer to all your problems?

We’ve all been there: you happily sign up and promise yourself you’re going to make every dollar in your subscription count. Except you rarely do.

It’s not just you — it’s everyone. In fact, fewer and fewer people are using their martech stack to its full capability.

Image via ChiefMartec


For a variety of reasons. Chief among them is the fact that most platforms churn out new feature after new feature, and the users cannot keep up with them. Or they simply don’t need them. Or the learning curve is too steep.

Whatever the reason, you waste 50% of your monthly subscription fee

At the same time, your favorite SaaS keeps growing because you pay more, whether you use it or not.

That hardly seems fair, does it?

It’s one of the main reasons why SyncApps nixed usage-based pricing. Our model is straightforward and it doesn’t require you to do complicated math to figure out what the ideal tier for you is. 

More on that later. For now, let’s look at the last piece of the good-bad-ugly puzzle of usage-based pricing.

Usage-Based Pricing: The Ugly

What can be uglier than wasting 50% of what you pay for? In my opinion, the myth of scalability

You see, ideal scalability should mean that you pay exactly for what you use, nothing more, nothing less. Murky scalability originated in cloud storage when providers had to put caps on their tiers.

These caps were more or less arbitrary. If you need more than 1TB of storage, you’re going to be automatically assigned to a new, more expensive pricing tier. Let’s say 2TB and almost double the price.

But what if you only use 1.3TB?

The line had to be crossed somewhere, you might say. And you’d be absolutely right.

The only problem? 

Drawing arbitrary usage lines means you’re not offering the real flexibility you promise. 

Users always end up paying more than they should the moment they cross a tier line — even if they do it by a hair.

Is there a better way? We think so, at least in iPaaS.

Yes, Unlimited Usage of a Platform Is Possible in iPaaS (and Don’t Let Anyone Tell You Otherwise)

In the past few months, we’ve had a lot of talks with SyncApps clients who migrated to us from other platforms — most of them with usage-based pricing. As expected, they got tired of paying for 100% of the subscription and only using 50%.

In iPaaS, it’s very easy to go over arbitrary limits. You want to test a new integration, a new setup, a new data flow, or a new connection. And you end up going “overboard”, even if you don’t regularly use all those integrations you’ve created.

All of a sudden, you’re paying more without actually doing more. Or without seeing a change in ROI.

The solution? Go back and cancel some record syncs so you fit the initial tier.

However, we are in the business of making your life easier by eliminating manual tasks. So it would be silly to ask you to do that, right?

Instead, even on our most affordable plan, you can sync up to 10 million records. That’s not entry-level integration, as you’d find on most platforms. 

On SyncApps, you have three pricing tiers and nothing more. While there are usage numbers and guidelines in each of them, we’ve found that no one has ever needed more. Our clients who upgraded did so because they needed access to all their historical data or because they wanted a new feature.

This is what growing along with your clients looks like. You don’t start charging them more the minute they’ve got one extra email address to add — perhaps they can’t convert it yet, so they don’t have the extra revenue to shed.

You can charge them more when they’re in a better position all around. If they need a new feature, it means that they got better at using automation and they have the time and the bandwidth to implement it.

To make sure that you don’t pay for SyncApps features you don’t use, we’ve added AI capabilities to our platform too. Steps AI is your virtual assistant who can recommend pre-built automations for you at every step.

All the recommendations are 100% personalized and based on the data you’ve added to the platform. Plus, if you need human support, it’s completely free on SyncApps — for every tier. And it’s there for you 24/7 with record-breaking reply speeds.

Want to switch to an integration platform with a fair pricing model and real flexibility? Try SyncApps today, it’s completely free!