In the competitive SaaS industry, usage-based billing models are increasingly favored for aligning pricing with customer value and driving revenue growth. This model, which charges customers based on actual consumption rather than fixed fees, incentivizes product adoption and customer success by correlating revenue with usage. It lowers entry barriers for startups and enterprises by allowing customers to start with minimal commitment and gradually increase usage as they find value. Usage-based billing provides natural revenue expansion opportunities, as customers who benefit from a product tend to use it more, leading to higher net revenue retention rates. Implementing this approach requires selecting appropriate pricing metrics, often combining subscription and usage components for predictable growth. Advanced strategies, such as tiered pricing and prepaid credits, can enhance effectiveness, while real-time metering systems ensure accurate billing. Successful industry examples include cloud infrastructure providers and communication platforms, which have leveraged usage-based models to scale revenue with customer growth. Platforms like Lago offer technical infrastructure for executing complex billing models, enabling businesses to focus on optimizing their pricing strategies.