Metered Services: What Are They and How Do They Work?

Metered services, where customers pay only for the resources they use, have evolved from metered phone calls in the 80s to various industries such as electricity, water, telecom, SaaS platforms, and cloud computing. This pricing model offers transparency and potential cost savings for customers while aligning revenue with actual usage for companies. Common users of metered pricing include utility service providers, telecommunication providers, SaaS companies, and cloud service providers. The benefits of metered services include fairness in charging, control over expenses, better understanding of customer behavior, and improved CLV. However, challenges include difficulty in forecasting revenue and the necessity for advanced billing systems and professional development teams. Businesses considering metered services should ensure their product usage is easily measurable and have an appropriate pricing strategy in place.