Attribute-Based Pricing

What is Attribute-Based Pricing?

Attribute-based pricing is a model where the price of a product or service varies based on specific characteristics or features rather than a single flat rate. In SaaS and subscription businesses, this typically means pricing that scales with factors like user count, data volume, API calls, feature access, or storage capacity.

The core idea: customers pay based on what they actually use or need, rather than a one-size-fits-all price.

How It Differs from Other Pricing Models

Attribute-based pricing sits between pure flat-rate and pure usage-based models:

• Flat-rate pricing charges the same amount regardless of usage or configuration

• Pure usage-based pricing charges strictly by consumption (per API call, per GB)

• Attribute-based pricing combines base pricing with variable elements tied to specific product dimensions

Most modern SaaS pricing is some form of attribute-based pricing, even when marketed as "tiered" or "per-seat." The tiers themselves are defined by attribute thresholds.

Common Pricing Attributes in SaaS

User-Based Attributes

The most familiar attribute is user seats, but modern platforms add nuance:

• Editor vs. viewer licenses: Platforms like Figma differentiate between users who create and those who only view

• Role-based pricing: Admin accounts priced differently than standard users

• Concurrent user limits: Pay for simultaneous access rather than total accounts

Usage-Based Attributes

• API calls or transactions: Common for payment processors, communication platforms, and integration tools

• Data volume: Storage, transfer, or processing measured in GB or TB

• Compute time: Serverless platforms and CI/CD tools often bill by execution time

Feature-Based Attributes

• Capability tiers: Basic, Professional, Enterprise with different feature sets

• Add-on modules: Optional capabilities priced separately from the core product

• Compliance and security features: SSO, audit logs, and advanced permissions often gated to higher tiers

Service-Level Attributes

• SLA guarantees: Higher uptime commitments command premium pricing

• Support tiers: Response time and support channel access as pricing dimensions

• Data retention periods: Longer historical data access at higher price points

Why Attribute-Based Pricing Works

Value Alignment

When pricing reflects actual product characteristics, customers perceive the price as fair. A startup with five users shouldn't pay the same as an enterprise with five thousand. Attribute-based pricing makes that distinction natural.

Revenue Expansion Without Reselling

As customers grow—more users, more data, more features—revenue grows automatically. This built-in expansion mechanism is why SaaS investors scrutinize net revenue retention so closely.

Market Segmentation

Different customer segments naturally self-select into appropriate pricing. A startup gravitates toward the minimal configuration; an enterprise adds attributes until they have what they need. One product serves multiple markets without custom negotiation for every deal.

Implementation Considerations

Selecting Attributes

Effective attribute selection requires understanding what drives customer value:

• Which features correlate with customer success and retention?

• What do customers ask about during sales conversations?

• Which dimensions align with your cost structure?

Avoid creating attributes purely for monetization. If an attribute doesn't correlate with customer value, pricing on it will feel arbitrary and create friction.

Balancing Simplicity and Flexibility

More attributes mean more pricing precision but also more complexity. Every attribute you add creates:

• Additional billing logic to maintain

• More decisions for buyers to make

• Greater surface area for pricing confusion

Many successful SaaS companies limit themselves to two or three primary attributes (users + tier, or users + usage), with additional attributes reserved for enterprise negotiations.

Preventing Bill Shock

Usage-based attributes require proactive communication. Best practices include:

• Usage dashboards showing current consumption against thresholds

• Alerts when approaching tier limits or budget caps

• Grace periods before overage charges apply

• Option to set hard spending limits

AWS, despite its complexity, pioneered many of these patterns with CloudWatch billing alarms and AWS Budgets.

Billing System Requirements

Attribute-based pricing demands more from your billing infrastructure than flat-rate subscriptions:

Metering and Tracking

Usage-based attributes require accurate, real-time metering. The billing system needs to ingest usage data, aggregate it correctly, and apply it to the right billing period.

Rating and Calculation

The billing engine must apply the correct rate to each attribute, handling:

• Tiered pricing with volume discounts

• Pro-rated mid-cycle changes

• Bundled attributes with complex interactions

• Currency conversion for global customers

Invoice Generation

Invoices need to clearly show each attribute's contribution to the total. Customers should understand exactly what they're paying for without contacting support.

Quote and Contract Management

Sales teams need tools to configure custom attribute packages, generate accurate quotes, and ensure contracts reflect the agreed pricing.

Common Challenges

Pricing Complexity

Too many attributes or overly complex rules create friction. Sales cycles lengthen when buyers need spreadsheets to understand pricing. Customer success teams spend time explaining bills instead of driving adoption.

The fix: ruthless simplification. If you can't explain your pricing in under a minute, reconsider the structure.

Margin Compression at Scale

Volume discounts and tiered pricing can erode margins on your largest customers. Model the economics carefully—your highest-usage customers should still be profitable.

Attribute Gaming

Customers sometimes optimize their usage to minimize costs in ways that don't reflect actual value. Per-seat pricing, for example, can incentivize account sharing. Design attributes that are difficult to game without also being difficult to track.

When Attribute-Based Pricing Makes Sense

Attribute-based pricing works well when:

• Customer value genuinely varies by the attributes you're measuring

• You have the billing infrastructure to track and bill accurately

• Your sales motion supports pricing conversations (vs. pure self-service at fixed prices)

• Customers expect pricing to scale with their usage or size

It may not be the right choice for:

• Early-stage products still discovering product-market fit

• Markets where simple, predictable pricing is a competitive advantage

• Products where the primary value isn't tied to measurable attributes

Key Takeaways for RevOps Teams

Attribute-based pricing is the dominant model in B2B SaaS for good reason—it aligns vendor economics with customer value. But implementation requires careful thought about which attributes to price, how to communicate pricing clearly, and what billing infrastructure you need.

Start with attributes that genuinely reflect customer value, limit complexity until proven necessary, and invest in billing systems that can handle the calculation and communication requirements. The goal isn't maximum pricing sophistication but optimal value capture with minimal friction.