{"id":3069,"date":"2025-08-31T14:30:43","date_gmt":"2025-08-31T14:30:43","guid":{"rendered":"https:\/\/fanso.io\/blog\/?p=3069"},"modified":"2026-01-22T08:51:32","modified_gmt":"2026-01-22T08:51:32","slug":"best-pricing-models-for-subscription-based-platforms","status":"publish","type":"post","link":"https:\/\/fanso.io\/blog\/best-pricing-models-for-subscription-based-platforms\/","title":{"rendered":"6 Best Pricing Models for Subscription-Based Platforms"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Subscription businesses<\/span><span style=\"font-weight: 400;\"> are well-known for offering value to customers and their recurring income. But to gain significant profits, you need a killer pricing strategy. One that sets a predictable revenue and strengthens customer relationships.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In this blog, we explore the top pricing models, their pros and cons and best practices for integration. If you\u2019re looking to capitalize on the subscription model, get ready for valuable insights to start your entrepreneurial journey!<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Here&#8217;s what you\u2019ll learn in this guide:<\/span><\/i><\/p>\n<ul>\n<li><b>Common pricing strategies for a subscription platform<\/b><\/li>\n<li><b>Top pricing models for subscription-based platforms<\/b><\/li>\n<li><b>Factors for Choosing the Right Pricing Model<\/b><\/li>\n<\/ul>\n<div id=\"toc_container\" class=\"toc_white no_bullets\"><p class=\"toc_title\">Table of Contents<\/p><ul class=\"toc_list\"><li><a href=\"#What_are_the_Common_Pricing_Strategies_for_a_Subscription_Platform\"><span class=\"toc_number toc_depth_1\">1<\/span> What are the Common Pricing Strategies for a Subscription Platform?<\/a><\/li><li><a href=\"#Top_Monetization_Models_for_Subscription-Based_Platforms_to_Bank_on\"><span class=\"toc_number toc_depth_1\">2<\/span> Top Monetization Models for Subscription-Based Platforms to Bank on<\/a><\/li><li><a href=\"#What_are_the_Factors_to_Choose_the_Right_Pricing_Model\"><span class=\"toc_number toc_depth_1\">3<\/span> What are the Factors to Choose the Right Pricing Model?<\/a><\/li><li><a href=\"#Conclusion\"><span class=\"toc_number toc_depth_1\">4<\/span> Conclusion<\/a><\/li><li><a href=\"#FAQ-Related_to_Monetization_Models_for_Subscription-Based_Platforms\"><span class=\"toc_number toc_depth_1\">5<\/span> FAQ-Related to Monetization Models for Subscription-Based Platforms<\/a><\/li><\/ul><\/div>\n<h2><span id=\"What_are_the_Common_Pricing_Strategies_for_a_Subscription_Platform\"><span style=\"color: #333399;\"><strong>What are the Common Pricing Strategies for a Subscription Platform?<\/strong><\/span><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Deciding the monetization model involves a lot of research and testing. There are multiple factors to consider, including<\/span><b> customer perception, market positioning, and revenue generation, etc.<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Here are the <\/span><b>common strategies to determine a monetization model<\/b><span style=\"font-weight: 400;\">:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Cost-Plus Pricing<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">The traditional pricing strategy is one where you <\/span><b>consider the production cost, market research, and profits.<\/b><span style=\"font-weight: 400;\"> It is applicable when the production cost is high in your business.\u00a0 However, this is not the sole driver of your subscription platform. Also, it&#8217;s not suitable for enterprise software.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Competitive Pricing<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">When you are new to the market, setting up your pricing based on competitors\u2019 offerings sounds practical. The goal is <\/span><b>not to offer the cheapest, but to justify the price point.<\/b><span style=\"font-weight: 400;\"> However, it\u2019s often difficult when market research is tedious.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Demand-based pricing<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Here, the pricing is based on the market demand fluctuations. Thus,<\/span><b> when the demand is up, the pricing goes up. <\/b><span style=\"font-weight: 400;\">On the other hand, the demand is low, and the pricing goes down. Increased profitability and customer satisfaction are the advantages of demand-based pricing.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Value-based Pricing<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">If you know your product\u2019s value, this pricing is the right fit. You don\u2019t need to decide your price tag based on your competitor\u2019s offering, but based on <\/span><b>the perceived value customers have about your offerings.<\/b><span style=\"font-weight: 400;\"> This is a customer-centric, strategic, and adaptable approach.<\/span><\/p>\n<div class=\"cta-2\">\n<div class=\"container\">\n<div class=\"row d-flex align-items-center justify-content-center cta-dark-bg mtb-1\">\n<div class=\"col-md-4 col-lg-4 col-sm-12 text-center cta-dark-bg w-100\"><a href=\"#\" target=\"_blank\" rel=\"noopener\"><img class=\"cta-img\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2023\/12\/only-fans.png\" \/><\/a><\/div>\n<div class=\"col-lg-8 col-md-8 col-sm-12 ptb-5 padding-0 ptb-1\">\n<h5 class=\"fs-4 lh-base fw-bold mb-1 color-white \">Looking to launch your own Subscription-based site with free installation and full branding<\/h5>\n<p class=\"mb-0\"><a class=\"btn-cta-green\" href=\"https:\/\/fanso.io\">Build Now<\/a><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<h2><\/h2>\n<h2><span id=\"Top_Monetization_Models_for_Subscription-Based_Platforms_to_Bank_on\"><strong><span style=\"color: #333399;\">Top Monetization Models for Subscription-Based Platforms to Bank on<\/span><\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Here are the <\/span><b>best monetization models for a subscription-based platform:<\/b><\/p>\n<h3><strong><span style=\"color: #333399;\">1. Flat-Rate Subscription<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">One of the simplest pricing models for subscription-based platforms is the flat rate model. <\/span><b>A fixed price is charged to access all the content or features on a recurring basis.<\/b><span style=\"font-weight: 400;\"> Now, this pricing could be monthly, quarterly, or yearly, and doesn\u2019t depend on your product usage.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is much like how <\/span><a href=\"https:\/\/www.netflix.com\/\"><span style=\"font-weight: 400;\">Netflix<\/span><\/a><span style=\"font-weight: 400;\"> works \u2014 one price, unlimited streaming. One of the most essential aspects of this model is simplicity and predictability. Another key aspect is unlimited access to content as much as you desire.<\/span><\/p>\n<figure id=\"attachment_3088\" aria-describedby=\"caption-attachment-3088\" style=\"width: 646px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3088\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/Skillshare-offers-a-standard-monthly-and-annual-pricing-plan-.png\" alt=\"Skillshare offers a standard monthly and annual pricing plan\u00a0\" width=\"656\" height=\"232\" \/><figcaption id=\"caption-attachment-3088\" class=\"wp-caption-text\">Skillshare offers a standard monthly and annual pricing plan<\/figcaption><\/figure>\n<h4><strong><span style=\"color: #333399;\">Pros:<\/span><\/strong><\/h4>\n<ul>\n<li><b>Simplicity and fixed pricing<\/b><span style=\"font-weight: 400;\"> for all customers<\/span><\/li>\n<li><b>Communicating the pricing is easy<\/b><span style=\"font-weight: 400;\"> for businesses<\/span><\/li>\n<li><b>Predictable monthly revenue<\/b><\/li>\n<li><b>Shortens the billing cycle<\/b><span style=\"font-weight: 400;\">, making marketing and invoicing easier<\/span><\/li>\n<li aria-level=\"1\"><b>Reduced <\/b><a href=\"https:\/\/fanso.io\/blog\/creator-acquisition-strategies-subscription-startups\/\"><b>customer acquisition<\/b><\/a><b> cost<\/b><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Cons:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>A one-size-fits-all strategy <\/b><span style=\"font-weight: 400;\">doesn\u2019t distinguish between small and big businesses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Doesn\u2019t offer much personalization,<\/b><span style=\"font-weight: 400;\"> and it doesn\u2019t scale with users or growth\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Large customers with increased usage<\/b><span style=\"font-weight: 400;\"> can lead to higher consumption costs<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it for?<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">\u00a0<\/span> <span style=\"font-weight: 400;\">Perfect for early-stage users, single-feature tools, and content libraries<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/www.netflix.com\/\"><span style=\"font-weight: 400;\">Netflix<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.masterclass.com\/\"><span style=\"font-weight: 400;\">MasterClass<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.skillshare.com\/en\/?via=header\"><span style=\"font-weight: 400;\">Skillshare<\/span><\/a><\/p>\n<h4><strong><span style=\"color: #333399;\">Best Practices:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Provide a value-driven service <\/b><span style=\"font-weight: 400;\">as per the customer persona<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offer bundled services, such as customer support, updates<\/b><span style=\"font-weight: 400;\">, and community access<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Works best when your product has a unified set of features<\/b><span style=\"font-weight: 400;\"> with no variation in value obtained by different users<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Monitor usage to identify <\/b><a href=\"https:\/\/fanso.io\/blog\/how-to-reduce-churn-on-your-creator-platform\/\"><b>potential churn<\/b><\/a> <span style=\"font-weight: 400;\">or upsell opportunities<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">2. Tiered Subscription<\/span><\/strong><\/h3>\n<p><i><span style=\"font-weight: 400;\">Does your subscription platform offer multiple features or customer segments?<\/span><\/i><span style=\"font-weight: 400;\"> Layer your <\/span><b>subscription based on features, usage, or user volume.<\/b><span style=\"font-weight: 400;\"> In fact, the<\/span><a href=\"https:\/\/hbr.org\/2018\/09\/the-good-better-best-approach-to-pricing\"> <span style=\"font-weight: 400;\">Harvard Business Review<\/span><\/a><span style=\"font-weight: 400;\"> states that the good-better-best tiered pricing is a straightforward tiered pricing approach.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Customers can access 2-5 tiers, each offering unique features or services based on their needs.\u00a0 The tiers are in incremental order of pricing or value. And each tier is designed for a specific segment of the audience.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The tiered pricing model is preferred by <\/span><b>SaaS and e-commerce businesses<\/b><span style=\"font-weight: 400;\">. The three common pricing models are:<\/span><b> basic, premium, and enterprise. <\/b><span style=\"font-weight: 400;\">This model is versatile as it can be tailored to customer needs. They can select the right plan based on their needs and budget.<\/span><\/p>\n<p><b>Different types of tiered subscriptions:<\/b><\/p>\n<ul>\n<li><b>Feature-based (Value-based): <\/b><span style=\"font-weight: 400;\">Each tier is categorized based on<\/span><b> unique features available at varying price points.\u00a0<\/b><\/li>\n<li><b>Usage-based (pay-as-you-go): <\/b><span style=\"font-weight: 400;\">Here, the subscription product or service is charged based on the <\/span><b>volume of consumption.<\/b><span style=\"font-weight: 400;\"> The metric could be the number of servers, processing calls, or seats.\u00a0<\/span><\/li>\n<li><b>Dynamic Tiers: <\/b><span style=\"font-weight: 400;\">Businesses can adjust their pricing based on <\/span><b>different market conditions.<\/b><span style=\"font-weight: 400;\"> This involves fluctuations in market demand, inventory levels, customer type, etc.<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">How to decide tiers for subscription?<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Building a tiered subscription needs some thought. The basic aim is to drive the perceived value with increasing tiers to justify the increasing price point. First, the subscription business must <\/span><b>categorize the audience into different segments.<\/b><span style=\"font-weight: 400;\"> Choose a <\/span><b>metric (e.g., usage, time, or feature )<\/b><span style=\"font-weight: 400;\"> for setting up tiers. Then, add the features in each tier based on the corresponding price.<\/span><\/p>\n<figure id=\"attachment_3089\" aria-describedby=\"caption-attachment-3089\" style=\"width: 521px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3089\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/Kajabis-Tiered-Pricing-Plan.png\" alt=\"Kajabi's Tiered Pricing Plan\" width=\"531\" height=\"262\" \/><figcaption id=\"caption-attachment-3089\" class=\"wp-caption-text\">Kajabi&#8217;s Tiered Pricing Plan<\/figcaption><\/figure>\n<h4><strong>Pros:<\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Appeals to different audience segments<\/b><span style=\"font-weight: 400;\"> and offers customer choice (basic to enterprise users)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cost flexibility<\/b><span style=\"font-weight: 400;\"> for both existing and new customers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increased upselling opportunities<\/b><span style=\"font-weight: 400;\"> to existing users<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Personalize user experience<\/b><span style=\"font-weight: 400;\"> based on user needs and expectations<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>High revenue potential <\/b><span style=\"font-weight: 400;\">from a wide range of users<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offer exclusive benefits and loyalty benefits<\/b><span style=\"font-weight: 400;\"> in higher tiers<\/span><\/li>\n<\/ul>\n<h4><span style=\"color: #333399;\"><strong>Cons:<\/strong><\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Too many tiers can be confusing<\/b><span style=\"font-weight: 400;\"> leads to decision fatigue<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Increased complexity<\/b><span style=\"font-weight: 400;\"> for management and billing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Changing different pricing tiers<\/b><span style=\"font-weight: 400;\"> to any tier is challenging<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it for?<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Best for niches like SaaS, course marketplaces, and AI tools. Tiered pricing is perfectly suited for feature-rich products, diverse segments, and growth-focused businesses.\u00a0<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/kajabi.com\/\"><span style=\"font-weight: 400;\">Kajabi<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.dropbox.com\/\"><span style=\"font-weight: 400;\">Dropbox<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"http:\/\/salesloft.com\/platform\/drift\"><span style=\"font-weight: 400;\">Drift<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.skillshare.com\/en\/?srsltid=AfmBOoqxttR67SgdqFNetoUMp9xJPpFRMjh8k-QzHP5o9uS-cwDcTCVe\"><span style=\"font-weight: 400;\">Skillshare<\/span><\/a><span style=\"font-weight: 400;\"> (Teams)<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Best Practices:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Perform market research<\/b><span style=\"font-weight: 400;\"> to understand your target audience and market better<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Ensure each pricing tier<\/b><span style=\"font-weight: 400;\"> offers unique value<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Make the middle pricing tier<\/b><span style=\"font-weight: 400;\"> is most appealing (the decoy effect)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offer transparent upgrade paths <\/b><span style=\"font-weight: 400;\">to make the transition to higher tiers seamless<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Combine perks with features <\/b><span style=\"font-weight: 400;\">in each tier<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">2. Freemium<\/span><\/strong><\/h3>\n<p><i><span style=\"font-weight: 400;\">Want to make the path to premium seamless? <\/span><\/i><span style=\"font-weight: 400;\">The freemium model allows users to get a hand on your product before the actual use.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Freemium (\u201cfree+ premium\u201d) involves two approaches: <\/span><b>basic product access at no cost and premium access as an advanced upgrade (optional).<\/b><span style=\"font-weight: 400;\"> Many subscription platforms have adopted the freemium model,<\/span><b> given the low barrier of entry.<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Further, businesses can monetise with advanced features and enhancements. While users get a grasp of the core product, you can nudge them to buy the full version.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Popular music streaming platform <\/span><a href=\"https:\/\/open.spotify.com\/\"><span style=\"font-weight: 400;\">Spotify<\/span><\/a><span style=\"font-weight: 400;\"> allows users to listen to music tracks for free with ads and less functionality. Further, users can upgrade to a premium subscription with offline listening, unlimited skips, etc.<\/span><\/p>\n<p><b>Paid subscriptions, ads, usage-based or tiered pricing, and one-time purchases<\/b><span style=\"font-weight: 400;\"> are the different ways to earn revenue in the freemium model.<\/span><\/p>\n<figure id=\"attachment_3090\" aria-describedby=\"caption-attachment-3090\" style=\"width: 610px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3090\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/Dropbox-Freemium-Pricing.png\" alt=\"Dropbox Freemium Pricing (Free storage up to 2 GB in basic plan)\u00a0\" width=\"620\" height=\"353\" \/><figcaption id=\"caption-attachment-3090\" class=\"wp-caption-text\">Dropbox Freemium Pricing (Free storage up to 2 GB in basic plan)<\/figcaption><\/figure>\n<h4><strong><span style=\"color: #333399;\">Pros:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Low barrier for user acquisition<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Businesses can easily build a <\/span><b>large customer base<\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Decide which premium features to develop<\/b><span style=\"font-weight: 400;\"> in the future<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Include multiple monetization streams <\/b><span style=\"font-weight: 400;\">like ads, in-app purchases, premium upgrades, and enterprise plans<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Cons:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Low conversion to actual users<\/b> <b>(2-10%) <\/b><span style=\"font-weight: 400;\">compared to free trials<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Needs a high budget t<\/b><span style=\"font-weight: 400;\">o support a large number of users<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Many are freeloading users<\/b><span style=\"font-weight: 400;\"> who don\u2019t intend to purchase the full version.<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it for?<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Best-suited for SaaS, content platforms, productivity &amp; utility apps, gaming, etc.\u00a0<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/open.spotify.com\/\"><span style=\"font-weight: 400;\">Spotify<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.dropbox.com\/\"><span style=\"font-weight: 400;\">Dropbox<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.duolingo.com\/\"><span style=\"font-weight: 400;\">Duolingo<\/span><\/a><\/p>\n<h4><span style=\"color: #333399;\"><strong>Best Practices:<\/strong><\/span><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Focus on balancing value with limitations i<\/b><span style=\"font-weight: 400;\">n your basic product<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Use clear upgrade nudges<\/b><span style=\"font-weight: 400;\"> like hit usage limit, unlock premium tools, etc.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Track conversion metrics<\/b><span style=\"font-weight: 400;\"> like free-to-paid conversion, churn reasons, to optimize based on user behaviour<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Nurture free user with onboarding <\/b><span style=\"font-weight: 400;\">and education<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">3. Credit-Based System<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">If you\u2019re looking for something between the flat-rate pricing and usage-based model, the credit-based system is a smart choice. <\/span><b>Customers can buy credits by paying for a portion of the service in advance and redeem them later.<\/b><span style=\"font-weight: 400;\"> This offers flexibility and ensures the cost is paid in advance.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Sounds complex?<\/span><\/i> <i><span style=\"font-weight: 400;\">Let\u2019s say you run a cloud communication platform like <\/span><\/i><a href=\"https:\/\/www.twilio.com\/en-us\"><i><span style=\"font-weight: 400;\">Twilio<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> for audio and video streaming. Instead of charging users for per-unit usage, you can sell credits in a subscription plan. Each credit can be later exchanged for a unit of service.\u00a0<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">Further, <\/span><b>platforms could even sell monthly or annual bundles of services that can be used as per convenience<\/b><span style=\"font-weight: 400;\">. Businesses could map services like \u201c1 credit = 1 API call\u201d or 1 credit = 1 stock photo.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Some platforms even offer options to top up and roll over unused credits.<\/span><i><span style=\"font-weight: 400;\"> For example, <\/span><\/i><a href=\"https:\/\/www.audible.com\/?srsltid=AfmBOorTr9YMoMzrTAseiOkYRP7rpAoTHOabqM1xxZP_KXfBtj14qYAZ\"><i><span style=\"font-weight: 400;\">Audible<\/span><\/i><\/a><i><span style=\"font-weight: 400;\"> offers a maximum of 6 credit rollovers, available within the premium plus plan.\u00a0<\/span><\/i><\/p>\n<figure id=\"attachment_3091\" aria-describedby=\"caption-attachment-3091\" style=\"width: 432px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3091\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/Audible-Credit-System.png\" alt=\"Audible Membership plan with credits\" width=\"442\" height=\"447\" \/><figcaption id=\"caption-attachment-3091\" class=\"wp-caption-text\">Audible Membership plan with credits<\/figcaption><\/figure>\n<h4><strong><span style=\"color: #333399;\">Pros:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Predictable revenue<\/b><span style=\"font-weight: 400;\"> as users pay for credits in advance<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Customers get flexible usage<\/b><span style=\"font-weight: 400;\"> as compared to rigid tiers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Upselling potential<\/b><span style=\"font-weight: 400;\"> with top-up credits<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Easier to market and communicate<\/b><span style=\"font-weight: 400;\"> the benefits of your service<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Cons:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Customers might find it challenging to understand <\/b><span style=\"font-weight: 400;\">the credit system<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Mapping credit values with actual prices could be tedious<\/b><span style=\"font-weight: 400;\"> for businesses<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Demands accurate tracking<\/b><span style=\"font-weight: 400;\"> to avoid overcharging or undercharging<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Hoarding credits<\/b><span style=\"font-weight: 400;\"> and using them together creates unpredictable usage patterns\u00a0<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it For?<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Businesses with complicated usage patterns like communication services, API and data services, stock photo and media platforms<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/www.audible.com\/?srsltid=AfmBOorTr9YMoMzrTAseiOkYRP7rpAoTHOabqM1xxZP_KXfBtj14qYAZ\"><span style=\"font-weight: 400;\">Audible<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.shutterstock.com\/\"><span style=\"font-weight: 400;\">Shutterstock<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/stock.adobe.com\/\"><span style=\"font-weight: 400;\">Adobe Stock<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.skillshare.com\/en\/?srsltid=AfmBOopQn4Qn-6u0y-VT_kJSKDMYQNBRPo1tYYE6rVjmlVzbF5am0MIN\"><span style=\"font-weight: 400;\">Skillshare<\/span><\/a><\/p>\n<h4><strong><span style=\"color: #333399;\">Best Practices:<\/span><\/strong><\/h4>\n<ul>\n<li><b>Match credit cost<\/b><span style=\"font-weight: 400;\"> with content value<\/span><\/li>\n<li><b>Define a clear and easy-to-understand credit value<\/b><\/li>\n<li><b>Create tiered subscription plans<\/b><span style=\"font-weight: 400;\"> with unique bundles and credits<\/span><\/li>\n<li><b>Integrate top-up and roll-over credits<\/b><span style=\"font-weight: 400;\"> into your pricing model<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">4. Pay-Per-User<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">A common pricing model in the SaaS industry is pay-per-user charges based on the number of users or seats on an account. <\/span><b>Businesses pay a recurring subscription fee up to X users and additional dollars for every user.<\/b><\/p>\n<p><b>Simplicity and scalability<\/b><span style=\"font-weight: 400;\"> are two main advantages of the pay-per-user model. The more the number of users, the higher the fee; the fewer the number of users, the lower the fee.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Scalability is intuitive in this model. As the team size grows, businesses can easily add new users and pay exactly for what they are using.<\/span><\/p>\n<figure id=\"attachment_3070\" aria-describedby=\"caption-attachment-3070\" style=\"width: 644px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3070\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/Notions-Pay-per-User-Pricing-Tiers.png\" alt=\"Notion\u2019s Pay-per-User Pricing Tiers\" width=\"654\" height=\"301\" \/><figcaption id=\"caption-attachment-3070\" class=\"wp-caption-text\">Notion\u2019s Pay-per-User Pricing Tiers<\/figcaption><\/figure>\n<h4><strong><span style=\"color: #333399;\">Pros:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Simple and straightforward f<\/b><span style=\"font-weight: 400;\">or both providers (platforms) and customers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Easily scale by adding new users<\/b><span style=\"font-weight: 400;\"> as your team or project size grows<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offers a steady revenue stream <\/b><span style=\"font-weight: 400;\">with customer growth<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Cons:\u00a0<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Unpredictable cost and billing<\/b><span style=\"font-weight: 400;\"> based on high usage<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>For heavy-duty businesses, more usage costs more<\/b><span style=\"font-weight: 400;\"> than a flat-rate pricing model<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Balancing fixed vs. variable costs<\/b><span style=\"font-weight: 400;\"> requires adjusting cover charges<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it for?:<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Platforms where usage costs significantly increase for more users and different customer tiers need varying levels of support.<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/slack.com\/\"><span style=\"font-weight: 400;\">Slack<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.microsoft.com\/en-us\/microsoft-teams\/group-chat-software\"><span style=\"font-weight: 400;\">Teams<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.notion.com\/\"><span style=\"font-weight: 400;\">Notion<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/asana.com\/\"><span style=\"font-weight: 400;\">Asana<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/trello.com\/\"><span style=\"font-weight: 400;\">Trello<\/span><\/a><\/p>\n<h4><strong><span style=\"color: #333399;\">Best Practices:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Combine per-user pricing<\/b><span style=\"font-weight: 400;\"> with other pricing models<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Evaluate your pricing strategy and optimize<\/b><span style=\"font-weight: 400;\"> it with Average Revenue Per User (ARPU)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offer per-user pricing as an add-on<\/b><span style=\"font-weight: 400;\"> if your product isn\u2019t team-based<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">5. Usage-Based<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">As the name suggests, usage-based pricing charges users <\/span><b>based on their actual consumption of the service or product. <\/b><span style=\"font-weight: 400;\">It is also known as \u201cmetered pricing\u201d or \u201cpay-as-you-go\u201d.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This is adept for businesses where the usage cannot be predetermined. For example, cloud services, APIs for voice &amp; video calling like Twilio, adopt this pricing model.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the upside, platforms can earn a higher revenue from high-value customers. A key advantage for customers is effective cost management and higher profit margins.<\/span><\/p>\n<figure id=\"attachment_3092\" aria-describedby=\"caption-attachment-3092\" style=\"width: 696px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" class=\" wp-image-3092\" src=\"https:\/\/fanso.io\/blog\/wp-content\/uploads\/2025\/08\/AWS-Usage-based-pricing.png\" alt=\"Amazon S3 Usage-based Pricing\" width=\"706\" height=\"221\" \/><figcaption id=\"caption-attachment-3092\" class=\"wp-caption-text\">Amazon S3 Usage-based Pricing<\/figcaption><\/figure>\n<h4><strong><span style=\"color: #333399;\">Pros:<\/span><\/strong><\/h4>\n<ul>\n<li><b>Earn higher revenue<\/b><span style=\"font-weight: 400;\"> from customers with more consumption<\/span><\/li>\n<li><b>Align your platform with customer success<\/b><\/li>\n<li><b>Offer low-upfront cost <\/b><span style=\"font-weight: 400;\">for businesses with low usage<\/span><\/li>\n<li><b>Higher <\/b><a href=\"https:\/\/fanso.io\/blog\/how-to-measure-ltv-lifetime-value-of-your-subscribers\/\"><b>lifetime value<\/b><\/a><span style=\"font-weight: 400;\"> for customers with more usage\u00a0<\/span><\/li>\n<\/ul>\n<h4><span style=\"font-weight: 400; color: #333399;\"><strong>Cons<\/strong>:<\/span><\/h4>\n<ul>\n<li><b>Unpredictable revenue\u00a0<\/b><\/li>\n<li><b>Complex billing and needs accurate metering,<\/b><span style=\"font-weight: 400;\"> reporting and tracking systems<\/span><\/li>\n<li><b>Difficult to market your platform <\/b><span style=\"font-weight: 400;\">as compared to flat-rate pricing<\/span><\/li>\n<\/ul>\n<h4><strong><span style=\"color: #333399;\">Who\u2019s it for?:<\/span><\/strong><\/h4>\n<p><span style=\"font-weight: 400;\">Platforms with products or services having varying usage, like cloud services, voice and video streaming APIs, and communication APIs.\u00a0<\/span><\/p>\n<h4><strong><span style=\"color: #333399;\">Examples:<\/span><\/strong><\/h4>\n<p><a href=\"https:\/\/aws.amazon.com\/\"><span style=\"font-weight: 400;\">AWS<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/www.twilio.com\/en-us\"><span style=\"font-weight: 400;\">Twilio<\/span><\/a><span style=\"font-weight: 400;\">, <\/span><a href=\"https:\/\/openai.com\/\"><span style=\"font-weight: 400;\">OpenAI<\/span><\/a><\/p>\n<h4><strong><span style=\"color: #333399;\">Best Practices:<\/span><\/strong><\/h4>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Define the right usage-based metric<\/b><span style=\"font-weight: 400;\">, like GB storage, API calls, or price\/tokens<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Offer discounts for higher volumes of usage<\/b><span style=\"font-weight: 400;\"> (with volume tiers)<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Provide dashboards, alerts or notifications<\/b><span style=\"font-weight: 400;\"> about the usage<\/span><\/li>\n<\/ul>\n<h2><span id=\"What_are_the_Factors_to_Choose_the_Right_Pricing_Model\"><strong><span style=\"color: #333399;\">What are the Factors to Choose the Right Pricing Model?<\/span><\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The long-term growth of your subscription business depends on choosing the right pricing model. Considering a few factors helps to make the right decision for your business.<\/span><\/p>\n<p><b>Ask these questions to choose the right monetization model:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Who are your customers?<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Research about your target audience and their needs, expectations and behaviour.<\/span><i><span style=\"font-weight: 400;\"> For example, your clients could be small businesses or huge enterprises. <\/span><\/i><span style=\"font-weight: 400;\">Understand the best way your service could align with their business needs.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">What are the trends, opportunities and challenges in the market?<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Analyze your competitor\u2019s offerings and pricing models. Check if they are <\/span><b>using the same pricing strategy and price range.<\/b><span style=\"font-weight: 400;\">\u00a0 Thus, you can find what your customers are willing to pay. Lastly, stay adept with the current trends and industry gaps to gain a competitive advantage.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">How do customers get value from a business?<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Consumer behaviour significantly<\/span><b> influences your decision to choose a specific pricing model. <\/b><span style=\"font-weight: 400;\">Find patterns in terms of usage of your platform. Your consumers might access on a<\/span><b> continuous, periodic or variable basis<\/b><span style=\"font-weight: 400;\">.\u00a0 Define your subscription plans to match their usage.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\">\n<h3><strong><span style=\"color: #333399;\">Does the pricing strategy help you reach your goals and profits?<\/span><\/strong><\/h3>\n<\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Of course, you can\u2019t neglect your financial goals in the decision-making process. While <\/span><b>balancing value with price, make sure the pricing model retains profits<\/b><span style=\"font-weight: 400;\">. The occasional usage spikes shouldn\u2019t affect your long-term growth.<\/span><\/p>\n<h2><span id=\"Conclusion\"><strong><span style=\"color: #333399;\">Conclusion<\/span><\/strong><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Running a successful subscription-based platform involves building a subscriber-centric business while thinking about platform growth. While finding the right pricing strategy is halfway through, nailing the right price to charge helps you stay in the game!\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Prioritize customer needs and expectations to select the right monetization model. Most importantly, choose a scalable model from the start that adapts to your evolving business needs.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We hope these strategies and steps define the right narrative for your subscription platform!<\/span><\/p>\n<div class=\"protip\">\n<p><strong>\u26a1Related Blogs:<\/strong><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li><a href=\"https:\/\/fanso.io\/blog\/best-kpis-to-track-for-a-subscription-based-platform\/\">Best KPIs to track for Subscription Platforms<\/a><\/li>\n<li><a href=\"https:\/\/fanso.io\/blog\/prelaunch-checklist-subscription-business\/\">Pre-launch Checklist for Subscription-based Platforms<\/a><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/div>\n<h2><span id=\"FAQ-Related_to_Monetization_Models_for_Subscription-Based_Platforms\"><strong><span style=\"color: #333399;\">FAQ-Related to Monetization Models for Subscription-Based Platforms<\/span><\/strong><\/span><\/h2>\n<h3><strong><span style=\"color: #333399;\">1. What is the best pricing model for a subscription-based platform?<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Subscription-based models don\u2019t adopt a one-size-fits-all approach for pricing. Instead, their pricing strategy depends on the target audience, content, value proposition and financial goals.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here are<\/span><b> pricing models for subscription-based platforms:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Flat-rate pricing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Tiered subscription<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Freemium<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Credit-based pricing<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pay-per-user<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Usage-based pricing<\/span><\/li>\n<\/ul>\n<h3><strong><span style=\"color: #333399;\">2. How to monetize from freemium users?<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Use in-app purchases, ad-free access, premium subscriptions, and usage limits to monetize from premium users. On the other hand, earn from the user base through ads or sponsorships.\u00a0\u00a0<\/span><\/p>\n<h3><strong><span style=\"color: #333399;\">3. How to choose subscription pricing?<\/span><\/strong><\/h3>\n<p><span style=\"font-weight: 400;\">Consider factors like fixed and variable costs, business model, value, and customer acquisition cost to determine the subscription pricing strategy. The right pricing balances costs with outright customer value.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Subscription businesses are well-known for offering value to customers and their recurring income. But to gain significant profits, you need a killer pricing strategy. One that sets a predictable revenue and strengthens customer relationships. In this blog, we explore the top pricing models, their pros and cons and best practices for integration. If you\u2019re looking &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"6 Best Pricing Models for Subscription-Based Platforms\" class=\"read-more button\" href=\"https:\/\/fanso.io\/blog\/best-pricing-models-for-subscription-based-platforms\/\" aria-label=\"More on 6 Best Pricing Models for Subscription-Based Platforms\">Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":3094,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_generate-full-width-content":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"no"},"categories":[28],"tags":[293,294],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v17.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>6 Best Pricing Models for Subscription-Based Platforms<\/title>\n<meta name=\"description\" content=\"Find the best pricing strategy for your subscription business. 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