While the discussion focuses on outcome pricing, the model most successful software companies actually run is hybrid: a base subscription combined with a usage or outcome component. Around 43% of SaaS firms use it and it is the most common primary structure in recent monetisation surveys of software companies, chosen by roughly 37% as their main model.
It gets less attention than pure outcome pricing because it is unglamorous. It is also the right default for almost every new vertical venture.
What the base fee is for
The base fee covers your cost to serve and buys predictability. It should be set at a level the customer approves without a business case, because the base is not where you capture value. It is where you remove uncertainty for both sides.
A common mistake is setting the base too low in an effort to reduce friction. A base that does not cover cost to serve means every additional customer makes the unit economics worse until usage ramps, which is a dangerous position for a company without funding.
What the variable component is for
The variable component captures value as the customer grows into the product. The critical property is that it should scale with something the customer wants more of, not something they want less of.
This distinction decides whether the model works. Charging per lane benchmarked scales with the customer expanding their freight network, which they want. Charging per defect logged scales with the customer having more defects, which they do not want, and creates an incentive to log fewer. The second design quietly destroys the data the product depends on.
“The variable component should scale with something the customer wants more of. Charge per defect logged and they will log fewer defects.”
Choosing the variable
Run three tests on any candidate variable. Does it grow when the customer succeeds? Can the customer suppress it without also suppressing their own value? Is it visible to the customer without you explaining it?
Lane count passes all three. Defect count fails the second. Seats fail the first in most vertical products. Storage fails the third, because nobody knows how much they use until the invoice arrives, which produces exactly the kind of billing surprise that ends relationships.
The variable component should scale with something the customer wants more of.
The expansion property
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Join the WaitlistHybrid pricing's real advantage is that it produces net revenue retention above 100% without price rises. Customers grow, the variable component grows, and revenue expands without an annual negotiation.
That property is worth more than it sounds. A venture with 118% net revenue retention grows meaningfully even with no new customers in a given quarter, which changes what a slow month means for the business.
Setting the split
A reasonable starting point for a vertical product is a base covering 60 to 70% of expected revenue at typical usage, with the remainder variable. That gives predictability while leaving real expansion headroom.
Weighting too far toward variable reintroduces the volatility problem that makes outcome pricing hard. Weighting too far toward base means you leave value on the table with the customers who get the most from the product, which are exactly the ones who would have paid more.
The anchor still matters
None of this substitutes for a credible anchor. The pricing conversation should still start from a number the customer already believes about their own losses. Hybrid is the structure. The anchor is the argument.
See our pricing structure for a worked example, and why outcome pricing is harder than it looks for what hybrid is avoiding.