What is “Pay-as-you-go” ?
“Pay-as-you-go” is a subscription billing strategy where customers are charged based on their usage. This means that they only pay for the service or product they use or consume, rather than paying a set fee for access. The billing frequency can vary, depending on the business and the type of service offered. For example, a customer might be charged based on the number of times they access a service, the amount of data they consume, or the number of products they order. This model is often used for services or products that are used infrequently or on a sporadic basis, as customers can avoid paying for access during periods when they are not using the service.
5 examples of businesses that use the pay-as-you-go subscription billing model:
- Dropbox: The popular cloud storage company offers a pay-as-you-go subscription model, where users are charged based on the amount of storage they use. This allows users to pay only for the storage they need, and avoid overpaying for unused storage.
- Amazon Web Services (AWS): AWS offers a pay-as-you-go pricing model for its cloud computing services. Customers are charged based on their actual usage of the service, with no upfront fees or long-term commitments.
- Salesforce: The popular customer relationship management (CRM) platform offers a pay-as-you-go subscription model, where customers are charged based on the number of users and features they need. This allows businesses to scale up or down their subscription as their needs change.
- Audible: The audiobook subscription service offers a pay-as-you-go model, where users are charged monthly for access to a certain number of audiobooks. Users can choose to cancel their subscription at any time without penalty.
- ClassPass: The fitness membership platform offers a pay-as-you-go subscription model, where users can purchase credits to attend fitness classes at various studios and gyms. Users can choose to purchase additional credits as needed, or cancel their subscription at any time.