Hybrid Pricing Model
Balance predictability and upside. Combine a recurring subscription fee (MRR) with usage-based overages to monetize all user types effectively.
Structure
Persona Usage
Revenue Stack
Revenue Composition
Base vs Overage
Base Stability
You earn $49 guaranteed from every active user, regardless of usage.
Heavy User Upside
Heavy users pay $249.00 ($200.00 variable). This aligns your revenue with their success/scale.
Allowance Check
Users consuming < 100 units pay $0 extra. Ensure this covers your acquisition target (e.g. Light/Med users).
Execution Steps
Set the 'Subscription Price' (Base MRR).
Set the 'Included Allowance' (e.g. 100 credits free).
Set the 'Overage Rate' for usage above the allowance.
Adjust usage levels for Light, Medium, and Heavy personas to see how their bills differ.
Pro Strategy
- Set the 'Included Usage' high enough to cover 80% of your users. Monetize only the top 20% heavy users with overages.
- Overage rates should be premium. If a heavy user is constantly paying overages, it's a trigger for them to upgrade to a higher tier plan.
- This model works perfectly for 'Land and Expand'. Low entry price (Sub), unlimited ceiling (Usage).
Core Concepts
Two-Part Tariff
An economic term for pricing that consists of a lump-sum fee (subscription) plus a per-unit charge (overage). It captures consumer surplus better than a single price.
Allowance
The amount of usage included in the base fee. Setting this correctly is crucial. Too high, and you lose variable revenue. Too low, and users feel nickeled-and-dimed.
Predictability vs Upside
Subscriptions provide predictable cash flow. Usage fees provide expansion revenue upside as customers grow.
What is Hybrid Pricing Model?
The Hybrid Model calculator simulates revenue composition across different user behaviors. It visualizes the ratio of Fixed Revenue (predictable) vs Variable Revenue (growth-dependent), allowing you to tune the 'Allowance' parameter to find the profit sweet spot.
Best For
- • Monetizing a product with high variable costs (e.g. AI tokens, Video hosting).
- • Transitioning from flat SaaS to usage-based.
- • Setting limits for 'Fair Use' policies.
Limitations
- • Assumes usage is constant month-to-month for the personas.
- • Doesn't model churn risk of high overage bills.
Alternative Methods
Usage-Based Sim
Pure metered billing without a base subscription.
Tiered Pricing
Hard limits that force plan upgrades instead of overages.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Intercom
Growing server costs for big clients.
Charged base fee + fee per active user.
Cell Phone Plans
Data hogging.
Unlimited talk/text (Base) + Throttled data or GB charges (Hybrid).