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