Modern SaaS pricing is a balancing act. You need to offer predictable, accessible plans while ensuring your revenue scales with the value you provide. While simple tiered or usage-based models work for many, a hybrid pricing strategy offers a powerful alternative that combines the best of multiple worlds to align your price perfectly with customer value.

A hybrid model isn’t just picking one strategy; it’s about thoughtfully bundling different pricing components—like a base subscription fee, per-seat charges, and metered usage—into a single, cohesive plan. This approach allows you to capture value from different dimensions of your product: its availability, the size of the team using it, and their consumption of key resources.

A hybrid pricing model is a strategy that combines two or more different pricing structures into one plan. The most common hybrid approach blends a recurring flat fee with variable components like per-user seats or metered usage.

Think of it like a mobile phone plan:

• Flat Fee: You pay a fixed $50/month for the base plan, which includes the line and standard features.
• Per-Seat (or Per-Line): You can add another line for a family member for an additional $10/month.
• Usage-Based: If you exceed your data allowance, you pay a certain amount per gigabyte.

This structure provides a predictable foundation while allowing the final price to flex based on how a customer’s needs grow or change.

A successful hybrid model strategically combines different value metrics. Each component is chosen to represent a distinct way a customer derives value from your product.

Here are the three core components and how they fit together:

• The Flat-Fee Foundation: This is a fixed, recurring charge that grants access to the product or a specific tier of features. It provides revenue predictability for you and cost predictability for the customer.
• The Per-Seat Multiplier: This charge scales directly with the number of users on an account. It aligns your price with the value a growing team receives from collaboration and shared access.
• The Usage-Based Variable: This component is metered, charging customers for specific actions or resources they consume, such as API calls, data storage, transactions processed, or credits used. It directly links cost to consumption.

Here’s a simple example of how these elements can be bundled in a single plan for a project management SaaS:

This model ensures a minimum monthly revenue of $100, scales with the customer’s team size, and captures additional revenue from high-consumption users.

Combining pricing components isn’t about making things more complicated; it’s about creating a fairer, more flexible system that benefits both the business and the customer.

Here’s why this approach is so powerful:

• Aligns price with value: Hybrid models let you charge for different dimensions of value simultaneously. A customer who has a small team but high usage pays a fair price, just as a large team with low usage does.
• Creates a predictable revenue floor: The flat-fee component ensures a baseline of predictable, recurring revenue, making financial forecasting more stable.
• Scales with multiple growth axes: Your revenue grows as your customers’ businesses grow—whether they add more users, consume more resources, or both. This avoids the ceiling effect of pure flat-rate pricing.
• Lowers the barrier to entry: You can set a lower initial flat fee to attract startups and smaller teams, knowing that the price will scale up as they become more successful and integrated with your product.

While powerful, hybrid models are not without their complexities. It’s important to be aware of the potential challenges before committing to this strategy.

The main challenges include:

• Complexity in billing logic: Engineering a billing system that can accurately track and invoice for multiple components is more difficult than a simple flat-rate subscription. It requires robust metering, clear invoicing, and prorating logic.
• Difficulty in communication: A multifaceted pricing structure can be harder for customers to understand. They need to clearly see how their usage and user count translate to their monthly bill to avoid confusion and disputes.
• Forecasting unpredictability: The variable, usage-based component makes revenue forecasting less precise than with purely subscription-based models. Predicting future consumption can be challenging.

To succeed with a hybrid model, focus on clarity, fairness, and transparency. A well-designed system empowers customers and feels equitable, not confusing.

• Build around a clear value metric: Your usage-based component should be tied to the single most important action or resource that represents customer value. For Twilio, it’s API calls; for HubSpot, it’s contacts.
• Ensure transparent communication: Your pricing page should be simple, and ideally interactive. A pricing calculator can help prospects understand their potential costs. For existing customers, provide a detailed dashboard showing real-time usage and a clear breakdown on every invoice.
• Provide guardrails and notifications: Help customers avoid surprise bills. Send automated notifications when they approach usage limits or when their bill is projected to be significantly higher than usual.
• Keep the model as simple as possible: Only add pricing components that are essential for aligning price with value. Starting with just two components (e.g., a flat fee and usage) is often better than launching a complex three-part model from day one.

Implementing a sophisticated pricing model requires a billing system that is flexible enough to handle different charge types within a single plan. Kinde’s billing infrastructure is designed to support the building blocks of hybrid pricing.

Within Kinde, you can construct plans that combine different pricing components to create a hybrid model. This is done by adding multiple line items to a single plan, each with its own pricing structure.

For example, you can build a plan that includes:

1. A Fixed charge to act as the base subscription fee.
2. A Metered feature to handle the usage-based component.

This allows you to define a predictable subscription base while also billing for variable usage, giving you the foundation needed to roll out a scalable, hybrid pricing strategy. The per-seat component can be managed through your application logic by adjusting the quantity of a line item based on the user count.

For more information on setting up these components, you can explore the Kinde documentation.

• Pricing models
• Create plans
• Add metered usage for a customer via API