Seat-Based Pricing

Seat-based pricing charges a recurring fee for each user, or seat, on an account. A customer with 5 seats pays five times the per-seat rate. Add a seat and the bill goes up. Remove one and it goes down. Team and collaboration software often uses it because customers can predict cost from headcount.

How it works

The subscription has a per-seat price and a quantity equal to the number of seats. When the team changes size, you update the quantity. Stripe changes the recurring charge and applies proration for the rest of the current cycle.

• Fixed seats. The customer buys a set number of seats up front and pays for all of them.
• Automatic seats. The quantity follows the number of active users.
• Tiered seats. The per-seat price drops at higher counts with tiered pricing.

Example

A team on a $12/seat/month plan with 8 seats pays `$96/month`. If they add 2 seats halfway through the cycle, proration charges about $12 for the remaining half. The next full cycle bills $120.

Why it matters

As a customer's team grows, so does their MRR, with no extra sales work. That makes seats a steady source of expansion revenue. It also works in reverse. Layoffs cut seats and revenue. Tracking seat changes as they happen shows which accounts are growing and which are shrinking, well before renewal.