A guide to subscription pricing models in 2025

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:

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

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