A guide to subscription pricing models in 2025
May 23, 2025
Ayush, Autumn Co-Founder
Pricing software is complicated, and most companies get it wrong at first.
We run Autumn, a billing platform that sits on top of Stripe. We see how companies price their products, what works, and what doesn't. Research backs up what we're seeing—tiered and usage-based models are becoming standard [1].
Here's a breakdown of the main pricing models and when to use each one.
Why Subscription Pricing Models Matter
AI changed the economics of running software. Each API call costs money. Features that used to be cheap are now expensive to provide.
This creates new problems:
How do you price when costs vary by user?
Should heavy users subsidize light ones?
How do you stay competitive while covering costs?
Subscription Tiers
Most SaaS still uses tiered pricing [1] [3]. You create 2-5 plans, each with different features and limits.
Keep it simple. Research shows that too many tiers confuse customers [1].
Example structure:
Tier Name | Monthly Price | Features Included | Usage Limit |
|---|---|---|---|
Starter | $0 | Basic features | 100 actions/month |
Pro | $29 | Advanced features | 1,000 actions/month |
Business | $99 | Premium support, API | 10,000 actions/month |
We've learned a few things:
Track which features actually drive upgrades
Test different usage limits
Make the value jump between tiers obvious
Free trials help users understand premium features before committing.
Usage-Based Pricing
Usage-based pricing charges based on consumption [1] [2] [3]. Think AWS—you pay for compute hours used.
It works when:
Customers "enable" your product and have it run in the background. Usage limits are better when your customers take action each time they use a product (eg, chatbot).
Your costs scale with usage
Customers want transparency
Benefits:
Fair for everyone
No artificial limits
Low barrier to start
Drawbacks:
Unpredictable revenue
Customers worry about bill shock
Criteria | Usage-Based Pricing | Volume Pricing |
|---|---|---|
Rate Application | Per unit consumed | One rate for all units based on total volume |
Customer Impact | Transparent but unpredictable | Simple but less flexible |
Best For | APIs, infrastructure | SaaS with predictable usage |
Freemium Models
Freemium is simple: free tier to attract users, paid tiers to make money [2] [3].
Common mistakes:
Giving away too much (nobody upgrades)
Giving away too little (nobody signs up)
Offering expensive features (like AI) for free
What works:
Start with generous limits during beta
Gradually tighten based on usage data
Monitor conversion rates closely
The best free tiers demonstrate value without satisfying all needs.
Hybrid and Credits-Based Pricing
Hybrid models combine approaches. A common pattern: base subscription plus usage charges [3].
Credits-Based Pricing
Users prepay for credits they can spend however they want. Popular for AI services where:
Usage is unpredictable
Customers want spending control
You want to avoid unpaid overages
Only use credits if multiple features consume them. Single-feature credits just confuse pricing.
Where Subscription Pricing Is Heading
Pure subscriptions are losing ground. Customers have subscription fatigue. They want to pay for value, not access [1] [3].
Trends we're seeing:
More usage-based components
Credits for unpredictable workloads
Hybrid models becoming standard
Better alignment between price and value
Conclusion: Building for Flexibility and Growth
Good pricing evolves with your product and customers. Start simple. Track what works. Be ready to change.
The technical side keeps getting more complex. That's why we built Autumn—to handle the billing complexity so you can focus on your product.
Learn more at useautumn.com.
Citations
[1] https://www.darwin.cx/blog/2025-subscription-pricing-models-trends-and-strategies
[2] https://www.spendflo.com/blog/the-ultimate-guide-to-saas-pricing-models
[3] https://www.byteplus.com/en/topic/498442