SaaS pricing glossary
Every pricing term used on SaaS Price Hub, defined plainly. Written for buyers, not vendors.
Add-on
An optional paid feature layered on top of a base plan. Common examples: extra storage, premium integrations, advanced AI features. Add-ons are the vendor's way of preserving low headline prices while charging power users more.
Annual discount
A percentage off the monthly price when you commit to paying yearly upfront. 15-25% is typical. Widening the gap between monthly and annual is a common way vendors nudge buyers toward longer commitments.
BYO (Bring Your Own)
When the customer supplies their own infrastructure keys — usually an AI API key, cloud account, or model access — rather than paying the vendor to resell it. Growing pattern in AI-native tools where customers want to control cost and data flow.
Commit discount
A discount granted for pre-committing to a minimum spend or usage volume over a contract period. Common in cloud infrastructure and AI API contracts.
Concurrent seat
A license that allows any user to sign in, up to a maximum number of simultaneous sessions. Older model, still used in some legacy tools like BI dashboards.
Enterprise pricing
A custom-quoted plan negotiated one-on-one with sales, usually for buyers over a certain size. No public number. Includes support, security features, and terms the self-serve tiers don't offer.
Entry price
The cheapest paid tier on a vendor's pricing page, ignoring any free plan. The number most buyers use to shortlist tools. SaaS Price Hub tracks entry price as the headline number for every tool.
Flat-rate pricing
A single price for unlimited use of a defined feature set. No per-seat multipliers, no usage meters. Rare in modern SaaS but common in early Basecamp-style products.
Free trial
Full-featured access to a paid plan for a limited time (7, 14, or 30 days is standard). Ends with a payment prompt or downgrade to a free plan.
Freemium
A pricing model with a free plan that has limitations, and paid plans that lift them. The free tier is a distribution mechanism, not a business model. Notion, Figma, and Airtable use freemium.
Grandfathered pricing
When existing customers keep their original rate after a public price increase. Retention tool: rewards loyalty and reduces churn during price changes.
Metered billing
Billing based on measured consumption after the fact, rather than a fixed subscription. Bills arrive monthly and vary based on usage that period. Common in AI APIs, cloud infrastructure, and payment processors.
Named seat
A license tied to a specific individual. Doesn't transfer between users without reassigning the seat. Common in enterprise SaaS.
Overage
A charge triggered when you exceed the included allowance on a metered plan. Often priced higher per unit than the base allowance, which is how vendors monetize customers who underestimated their usage.
Per-seat pricing
A pricing model where you pay a fixed amount per user per month or year. Common in team collaboration tools like Slack, Notion, and Asana. The total bill scales linearly with headcount.
Seat cap
A maximum number of users allowed on a specific plan. Bitrix24's free plan caps at 5 users; going over forces an upgrade.
Sunset
When a vendor discontinues a plan, feature, or entire product. Customers on that plan are usually migrated to a new tier, often at a higher price.
Tiered pricing
Multiple pre-set plans (usually 3-4) at ascending prices, each unlocking more features or higher limits. Most SaaS uses this. Example: Slack's Pro, Business+, Enterprise+ tiers.
Usage-based pricing
A pricing model where the bill scales with consumption — API calls, transactions processed, storage used. Common in developer tools (Stripe, Twilio) and AI APIs (OpenAI, Anthropic).
Volume discount
A lower per-unit price applied at higher purchase quantities. Common in usage-based pricing (buy 1M tokens, get a discount over the 100K rate).