1. Scope
Compares per-account monthly revenue across flat-monthly, per-seat, usage-based, and hybrid models for a single account profile. Doesn't account for sales-cycle differences, contract term lock-in, or willingness-to-pay variance.
2. Inputs and outputs
Inputs
- avgUsersPerAccount number
- avgUsageUnitsPerUserPerMonth number
- grossMarginPerUnit number ($)
- churnMonthly number (0–1)
- competitorSeatPrice number ($)
- competitorUsagePrice number ($)
Outputs
- recommendedModel
Highest projected single-month revenue per account.
- projections
Per-account revenue under all four models.
Engine source: src/lib/pricing-model-picker/engine.ts
3. Formula / scoring logic
flat = competitor_seat × 5
per_seat = competitor_seat × users
usage = competitor_usage × users × usage
hybrid = competitor_seat × users + competitor_usage × max(0, total_usage − 100×users)
all × (1 − churn)4. Assumptions
- Flat-monthly anchor at 5× seat price; reinterpret as your own anchor if your benchmark differs.
- Hybrid includes 100 units per seat; overage pricing applies above that.
- Churn applied as a 1-month retention multiplier — not a steady-state model.
5. Data sources
- OpenView SaaS Benchmarks as of 2024
- ProfitWell Pricing Strategy as of 2024
6. Known limitations
- Doesn't model price elasticity — a higher price model may win revenue but lose customers.
- Per-seat assumes no seat-volume discount; usage-based assumes flat rate above zero.
7. Reproducibility
Input
5 users, 200 units, 0.05 margin, 0.03 churn, $25 seat, $0.10 usage.
Expected output
Hybrid wins at ≈ $169.75 per account.
8. Change log
- 2026-05-08 methodology first published.
Worked example
Run live against the same engine this site ships
(/engines/pricing-model-picker.js).
The inputs and outputs below are recomputed on every build and
independently re-verified in CI — they are never hand-authored.
Input
- tool
- pricing_model_picker
- avg_users_per_account
- 5
- avg_usage_units_per_user_per_month
- 200
- gross_margin_per_unit
- 0.05
- churn_monthly_pct
- 3
- competitor_seat_price
- 25
- competitor_usage_price
- 0.1
Output
- recommendedModel
- hybrid
- recommendedLabel
- Hybrid (seat + overage)
- recommendedMonthlyRevenue
- 169.75
- projections[0].model
- flat_monthly
- projections[0].label
- Flat monthly
- projections[0].monthlyRevenuePerAccount
- 121.25
- projections[1].model
- per_seat
- projections[1].label
- Per-seat
- projections[1].monthlyRevenuePerAccount
- 121.25
- projections[2].model
- usage_based
- projections[2].label
- Usage-based
- projections[2].monthlyRevenuePerAccount
- 97
- projections[3].model
- hybrid
- projections[3].label
- Hybrid (seat + overage)
- projections[3].monthlyRevenuePerAccount
- 169.75
- retainedFraction
- 0.97
Frequently asked questions
- What does the Pricing Model Picker calculate?
- Compares per-account monthly revenue across flat-monthly, per-seat, usage-based, and hybrid models for a single account profile. Doesn't account for sales-cycle differences, contract term lock-in, or willingness-to-pay variance.
- What inputs does the Pricing Model Picker need?
- It takes 6 inputs: avgUsersPerAccount, avgUsageUnitsPerUserPerMonth, grossMarginPerUnit, churnMonthly, competitorSeatPrice, competitorUsagePrice. Outputs returned: recommendedModel, projections.
- What formula does the Pricing Model Picker use?
- The exact computation is: flat = competitor_seat × 5; per_seat = competitor_seat × users; usage = competitor_usage × users × usage; hybrid = competitor_seat × users + competitor_usage × max(0, total_usage − 100×users); all × (1 − churn)
- Can I verify the Pricing Model Picker with a worked example?
- Yes. With 5 users, 200 units, 0.05 margin, 0.03 churn, $25 seat, $0.10 usage. the tool returns Hybrid wins at ≈ $169.75 per account.
- Where does the Pricing Model Picker get its benchmark data?
- Reference data is sourced from: OpenView SaaS Benchmarks (as of 2024); ProfitWell Pricing Strategy (as of 2024).
- What can the Pricing Model Picker not tell me?
- Known limitations: Doesn't model price elasticity — a higher price model may win revenue but lose customers. Per-seat assumes no seat-volume discount; usage-based assumes flat rate above zero.