Why We Chose Usage-Based Pricing

Traditional SaaS pricing is broken. You pay the same whether you use a product once a month or every day. We're changing that with usage-based pricing across all GrepLabs products.

The Problem with Flat Subscriptions

Consider a typical SaaS tool at $10/month:

• Heavy user (daily): Pays $10, gets great value
• Light user (weekly): Pays $10, questionable value
• Occasional user (monthly): Pays $10, poor value

The occasional user subsidizes the heavy user. This feels unfair and leads to churn.

Usage-Based Pricing: A Better Model

With usage-based pricing:

• Pay only for what you use
• Start free, scale naturally
• No commitment required
• Costs align with value received

How It Works at GrepLabs

Shields AI

Free Tier:

• 100,000 DNS queries/month
• 5 devices
• Basic blocklists

Usage Pricing:

• $0.01 per 1,000 queries over free tier
• Capped at $4.99/month (unlimited at that point)

Example:

• Light user: 50K queries → $0 (free tier)
• Medium user: 200K queries → $1.00
• Heavy user: 1M+ queries → $4.99 (cap)

Hippo

Free Tier:

• 10,000 files indexed
• Basic search
• Local storage only

Usage Pricing:

• $0.001 per file over free tier
• $0.10 per GB of cloud sync
• Capped at $19.99/month

Example:

• Casual user: 5K files, no sync → $0
• Power user: 50K files, 10GB sync → $5.00
• Team: 100K files, 50GB sync → $14.00

Chai.im

Free Tier:

• Unlimited 1-on-1 messages
• Groups up to 10 members
• Basic features

Usage Pricing:

• $0.50 per large group (11-100 members)
• $2.00 per large group (100+ members)
• $5.00 per enterprise feature (SSO, audit logs)

Example:

• Personal use: Small groups → $0
• Team: 3 large groups → $1.50
• Enterprise: SSO + audit → $10.00

GrepCoin

Free:

• All games playable
• Basic rewards
• Community features

Optional:

• Battle Pass: $9.99/month
• Tournament entry: Variable
• NFT fees: 2.5% on trades

Why This Works Better

For Users

• **Lower barrier to entry**: Free tier is genuinely useful
• **Fair pricing**: Pay proportional to value received
• **Predictable scaling**: Know costs will grow with usage
• **No commitment**: Cancel anytime, no sunken costs

For GrepLabs

• **Aligned incentives**: We succeed when you use our products
• **Natural expansion**: Users grow into paid tiers
• **Reduced churn**: Light users stay on free tier instead of canceling
• **Market signal**: Usage data shows what features matter

Implementing Usage Tracking

We track usage transparently:

// Example: Shields AI query tracking
interface UsageMetrics {
  userId: string;
  period: string;  // "2024-01"
  queries: number;
  blockedQueries: number;
  devices: number;
}

// User dashboard shows real-time usage
function UsageDashboard({ metrics }: { metrics: UsageMetrics }) {
  const freeQueries = 100_000;
  const overage = Math.max(0, metrics.queries - freeQueries);
  const cost = Math.min(overage * 0.00001, 4.99);

  return (
    <div>
      <h3>This Month's Usage</h3>
      <p>Queries: {metrics.queries.toLocaleString()}</p>
      <p>Free tier: {freeQueries.toLocaleString()}</p>
      <p>Overage: {overage.toLocaleString()}</p>
      <p>Current cost: ${cost.toFixed(2)}</p>
      {cost >= 4.99 && <p>You've hit the cap - unlimited for $4.99!</p>}
    </div>
  );
}

Handling Edge Cases

Billing Surprises

We prevent unexpected bills:

• Real-time usage dashboards
• Email alerts at 50%, 80%, 100% of expected usage
• Hard caps that can't be exceeded
• Grace periods for overages

Enterprise Needs

For predictable budgeting:

• Annual commitments with discounts
• Committed use pricing
• Custom caps and terms

Seasonal Variation

Usage varies by month:

• No penalty for low months
• Unused free tier doesn't roll over (keeps pricing simple)
• Annual plans average out variation

The Numbers

Since implementing usage-based pricing:

• **Free tier retention**: 85% (vs 60% with trials)
• **Conversion to paid**: 15% (vs 5% with flat pricing)
• **Net revenue retention**: 120% (users grow over time)
• **Customer satisfaction**: 4.8/5 on pricing fairness

Common Concerns

"What if I get a huge bill?"

Hard caps prevent this. Shields AI maxes at $4.99/month no matter what. We'd rather cap revenue than surprise users.

"How do I budget for this?"

We provide:

• Historical usage trends
• Projected costs based on growth
• Annual plans with fixed pricing

"Isn't tracking usage creepy?"

We track aggregate counts, not content:

• "You made 150K queries" not "You visited these domains"
• Full transparency in what we track
• Privacy-preserving analytics

Conclusion

Usage-based pricing aligns incentives between users and providers. You pay for value received, we're incentivized to make products you actually use. It's fairer for everyone.

*Check out our detailed pricing at /monetization or try our products free to see usage-based pricing in action.*