Is Token-based Pricing Right for you ?

SaaS products are increasingly complex in nature, and companies typically transition from offering one product with a handful of features to offering software suites with many products, each with multiple features. The customers are also more complex - their values and perceptions are constantly changing, as are their usage patterns.

Traditional SKU-based pricing strategies, originally designed for physical goods, fail to provide the flexibility you and your customers need for SaaS products. Changing SKUs as you monetize new products and features involves spinning up a project, changing prices is a multi-month effort, and chasing customers for overuse for every new product sale is expensive. Custom pricing is hard to operationalize, and involves extensive manual efforts. Usage based billing results in customer churn and substantial accounts receivables balance.

Token-based pricing is a proven Go-To-Market model if any of these is true for your SaaS business:

  • Your product can be monetized based on either usage or subscription
  • You want to get money upfront for future usage
  • Customer usage of monetizable features is hard to estimate
  • Customer usage frequently grows more than contracted, and you lose that additional revenue for the sake of good customer experience
  • You do not want to invest in multiple sales cycles for the same customer as you bring up new products and services
  • You do not want to carry an accounts receivables balance for monthly billing
  • You plan to launch more features and products that your existing customers may want to try and buy
  • Your cost structure is driven by customer usage and you want to have predictable margins
  • Your customers are likely to churn unless you offer them your latest products and services
  • You would like your customers to try all your products before they make a purchase decision

Which Token Pricing Strategy is Best for You?

Usage Based Tokens

  • The token carries non-depreciating value

  • The token is consumed only when the customer exchanges it for a product or feature usage

  • The token expires at the end of the term

Examples of usage-based tokens: Casino chips, Gift Cards, Airline Miles. Most appropriate for units of measure like MB of data scanned, number of API calls etc

Time Based Tokens

  • The token is priced and issued for a fixed duration. The pricing is based on the duration as well

  • Token continues to depreciate irrespective of consumption

  • Token is used to offer fungibility of products and features within a fixed capacity

Examples of time-based tokens: one-day entry ticket to Disneyland, internet bandwidth of X mbps. Appropriate of unit of measures like number of concurrent/total users, thickness of the data pipe etc.

Subscription Tokens

  • The token carries non-depreciating value, but has a duration associated with it. The pricing is based also on the duration

  • The token is consumed when the customer exchanges it for a usage for a duration

  • The token expires at the end of the term

Examples of tokens: one-month subscription of Spotify / Netflix. Appropriate for units of measure like per user per month, per app per month etc.


Standard monthly subscription pricing works great for your small and medium-sized customers that can fit into your subscription tiers. Large enterprises typically demand more flexibility in pricing and usage, and prefer a longer-term contract, for which, token-based pricing is a proven model.

Token-based licenses have an expiration, just like any other contract. They expire at the end of the term defined by you.

Yes - with a contract revision, you can transition all your existing customers to token-based licenses.

Since token-based licensing offers a greater flexibility to your customers, tokens per unit should be priced higher than the al-a-carte product price per unit.

CoinTaaL provides an out-of-the-box capability to create and operationalize custom pricing, which is automatically applied at the time of token consumption.

CoinTaal provides a self-contained product onboarding and provisioning platform for your developers and QA teams to test product provisioning flows. Using CoinTaaL for your non-production environments is always free.

Absolutely! CoinTaaL platform also provides a basic customer and role-based user management UI that you can use as your basic CRM for now.

Case studies

Comparison with Other Products

  • Zuora: Offers subscriptions, consumption, or a hybrid approach
  • Chargebee: Provides subscription billing, recurring billing and subscription management
  • Metronome: Allows metering, usage based billing using credits based pricing model

Research Articles