Pricing models

What is a pricing model?

A pricing model is a structured approach that businesses use to determine how they charge customers for their products or services. It defines the cost, billing structure, and payment terms that guide revenue generation.

Pricing models vary based on business goals, customer needs, and industry standards. Common pricing models include flat-fee, per user, usage-based, once-off etc.

Veriam enables businesses to configure different pricing models for their subscription-based services. Providers can choose the best model to match their business strategy while ensuring seamless billing and revenue management.

Why are pricing models important?

A well-designed pricing model:

• Aligns with customer expectations and perceived value.

• Provides predictable revenue for businesses.

• Helps attract and retain customers by offering flexibility.

Veriam pricing models

Veriam offers various pricing models (and more coming soon) to provide flexibility for providers to set up and change plans according to business and customer needs. These are the pricing models currently supported.

Free

A free plan is a pricing model where customers can access a product or service without paying a subscription fee. Free plans are often used to attract users, offering limited features while encouraging upgrades to paid plans.

Pros of free plans:

✅ Increases Brand Awareness – More people try the product, leading to organic growth. ✅ Encourages Experimentation – Users can explore features risk-free. ✅ Boosts Conversion Potential – A good free experience can lead to paid subscriptions.

Cons of free plans:

❌ Revenue Delay – No immediate revenue unless users upgrade. ❌ Resource Consumption – Free users still require server space, support, and maintenance. ❌ Potential for Abuse – Some users may never convert to paying customers.

In Veriam:

Providers can create free plans to allow users to access products without payment. This is the default pricing model when a plan is created. It is still possible for customers to cancel a free subscriptions, to provide them with the flexibility to revoke access for all their users if needed.

Flat-fee

A flat-fee recurring pricing model is a subscription pricing strategy where customers pay a fixed amount at regular intervals (e.g., monthly or annually) for continued access to a product or service. The price remains the same regardless of usage, the number of users, or additional features.

Flat-fee pricing is widely used because of its simplicity and predictability for both businesses and customers. Companies prefer it as it provides stable, recurring revenue, while customers appreciate the transparent and predictable costs.

It is commonly used in:

• Software-as-a-Service (SaaS) (e.g., a single-tiered subscription for a tool)

• Media & Entertainment (e.g., streaming services)

• Membership-based services (e.g., online communities, gyms, or learning platforms)

Pros of flat-fee pricing:

✅ Simplicity – Easy to understand and communicate to customers. ✅ Predictable Revenue – Provides businesses with steady, recurring income. ✅ Easy Billing & Management – Reduces complexity in invoicing and payment processing. ✅ Customer Loyalty – Encourages long-term commitments without worrying about variable costs.

Cons of flat-fee pricing:

❌ Limited Scalability – Revenue doesn’t grow as customers use more resources or expand usage. ❌ Potential for Overpaying or Underpaying – Some customers may feel they’re paying too much for limited usage, while heavy users get disproportionate value. ❌ Less Flexibility – Harder to accommodate different customer segments or usage patterns.

In Veriam:

Providers can set up flat-fee plans to charge customers a fixed recurring amount. It is billed in advance which means customer must first pay before getting access to the subscription. These subscriptions automatically renew at each billing cycle unless the customer cancels.

If a customer cancels, the subscription will remain active until the end of the billing cycle at which time it will cancel and access will be revoked. This is industry standard to ensure predictable income for at least the current billing cycle, and avoids doing pro rata refunds

Providers benefit from predictable revenue and simple subscription management, while customers enjoy straightforward pricing with no surprises.

Per user

A per-user pricing model charges customers based on the number of users that have access to a product or service. The cost scales linearly, meaning that as a customer adds more users, their total subscription fee increases accordingly. This model is commonly billed monthly or annually.

For example, if a SaaS company charges $10 per user per month, a business with five users would pay $50 per month.

Per-user pricing is widely used in B2B SaaS, particularly for collaboration, productivity, and enterprise software, because it:

Pros of per-user pricing:

✅ Scalable Revenue – As customers grow, they generate more revenue. ✅ Customer-Friendly – Businesses only pay for what they use. ✅ Encourages Adoption – Straightforward cost structure helps justify purchasing decisions. ✅ Works Well for Team-Based Software – Ideal for platforms like CRM, project management, and collaboration tools.

Cons of per-user pricing:

❌ May Discourage Broad Adoption – Some businesses limit users to control costs, reducing engagement. ❌ Not Ideal for Low-Usage Users – Smaller teams or light users might find the model expensive. ❌ Revenue Dependency on Team Size – If a customer downsizes, revenue decreases. ❌ Potential for Seat-Sharing – Some teams may share logins to avoid extra costs, leading to lost revenue.

In Veriam

Providers can configure per-user pricing for their subscriptions, allowing automatic adjustments when customers add or remove users. Billing is handled in arrears and on a pro rata basis, ensuring customers are charged accurately based on their actual usage within each billing cycle.

If all users are removed from the subscription, the subscription remains active and the customer is free to add users to start using the subscription again. This promotes retention. While there are no users present on the subscription, nothing will be charged to the customer.

One-time cost

A one-time cost plan (also referred to as a lifetime or fixed-cost plan) charges customers a single upfront payment for access to a product or service. Unlike recurring subscriptions, users pay once and gain indefinite or time-limited access without ongoing charges.

Pros of one-time cost plans:

✅ Instant Revenue Generation – Full payment is received at the time of purchase. ✅ No Long-Term Commitment for Customers – Attracts users who prefer upfront costs. ✅ Easier Financial Planning – No fluctuating revenue based on subscription churn.

Cons of one-time cost plans:

❌ No Recurring Revenue – Unlike subscriptions, revenue does not compound over time. ❌ Limited Customer Lifetime Value (LTV) – Customers may not generate additional revenue post-purchase. ❌ Ongoing Costs for Providers – Requires long-term maintenance, updates, and support without continuous payments.

In Veriam

Providers can create one-time cost plans, allowing customers to pay upfront for software or services without a recurring subscription. It is still possible for customers to cancel a one-time cost subscriptions, to provide them with the flexibility to revoke access for all their users if needed.

Soon, providers will also be able to combine a one-time cost with a recurring price for plans.