This is something that has been known for many years in the consumer space: customers dislike usage based price even if it would be cheaper. This is both because they don't like the unpredictability and also because now every transaction involves a tiny pang of losing money. "Unlimited for a constant fee" is much nicer psychologically, because you take away the guilt of using the app.
This is mostly a thing in consumer products though, perhaps for b2b it is different.
I agree with this reasoning where it concerns someone who already recognizes that what they are using is a worthwhile tool for what they want to do on a regular basis. But for a looser test drive situation sometimes the flat sign up here with autorenewal and don't forget to cancel darkish patterns can be a blocker to entry. I look at it like a pre-paid vs post-paid mobile phone story where sometimes you just want less friction and hassle than a contract even if it's benefits are better. The thought experiment below is simple and who knows if User A would come back to the tool if faces with a problem to solve in month 3 but I think it supports a UBP approach.
User Journey A
One (out of 100 landings) decides to take a 1-month $10 subscription, fiddles around a little but at the end of the month is not convinced of the value based on how much the tool was used. Cancels Subscription.
User Journey B
One (out of 70 landings) decides to put down a $10 prepaid amount for a block of product usage. Month 1 has limited usage. Month 2 has limited usage. But in Month 3, they face a problem this product solves and find long term value along the way.
Comments
This is something that has been known for many years in the consumer space: customers dislike usage based price even if it would be cheaper. This is both because they don't like the unpredictability and also because now every transaction involves a tiny pang of losing money. "Unlimited for a constant fee" is much nicer psychologically, because you take away the guilt of using the app.
This is mostly a thing in consumer products though, perhaps for b2b it is different.
I agree with this reasoning where it concerns someone who already recognizes that what they are using is a worthwhile tool for what they want to do on a regular basis. But for a looser test drive situation sometimes the flat sign up here with autorenewal and don't forget to cancel darkish patterns can be a blocker to entry. I look at it like a pre-paid vs post-paid mobile phone story where sometimes you just want less friction and hassle than a contract even if it's benefits are better. The thought experiment below is simple and who knows if User A would come back to the tool if faces with a problem to solve in month 3 but I think it supports a UBP approach.
User Journey A One (out of 100 landings) decides to take a 1-month $10 subscription, fiddles around a little but at the end of the month is not convinced of the value based on how much the tool was used. Cancels Subscription.
User Journey B One (out of 70 landings) decides to put down a $10 prepaid amount for a block of product usage. Month 1 has limited usage. Month 2 has limited usage. But in Month 3, they face a problem this product solves and find long term value along the way.