When Should you Consider Metered Billing

Metered billing, also known as "Pay As You Go" or "Usage-Based Billing," is a payment model where customers only pay for the services they use, making it popular in both utilities and software services. This model is particularly beneficial for SaaS companies and aligns well with customer-driven growth strategies, such as product-led growth, by reducing the entry barrier for new customers and scaling in real-time. It is especially advantageous for developer-led and B2B SaaS companies, as it offers technical decision-makers control over their discovery process, facilitating faster integration and boosting customer acquisition and loyalty. The model's success hinges on accurately tracking value metrics like API calls and unique users, ensuring both the company and its customers derive maximum benefit. While metered billing can pose risks like unintended costs for customers, these challenges can be mitigated with rate limits or other solutions, such as those from Moesif. Despite its potential drawbacks, adopting metered billing can significantly enhance growth, particularly for businesses targeting technical audiences, by offering a transparent and frictionless billing experience.