One of the common pricing models used in SaaS and Subscription business is to charge the customer “per user”.
To understand why the “Per user” pricing model might not be the best model for SaaS business, we need to understand the core concepts of “SaaS pricing value metric”
An ideal value metric checks 3 main boxes:
a. easy for the customer to understand
b. align with the customer needs
c. grow with the customer
When you price “per user”, you effectively charge a customer per seat sold (eg. your right to sit in a flight is granted by reserving a ticket). And the fact that you are assuming that the value of the service provided is identical for all the customers is the main challenge with “Per user” pricing.
Ideally, you would want to have metrics like ARR, MRR, Churn rate, Daily active users, etc. that can help measure the actual value that a customer is deriving from the same software.
I agree, there are operational challenges that one needs to factor in when determining this “actual value” (metering, billing, etc.), but in the long run, you as a SaaS company start growing with your customers