Flat-rate pricing

Flat-rate pricing charges one number per period. $2,000 a month, whoever uses it and however much.

Its virtues are real and often undervalued: it is trivial to quote, trivial to bill, trivial to forecast, and the customer’s finance team can approve it without modelling anything. For products with low marginal cost of service and a narrow band of customer sizes, it is frequently the right answer.

Where it stops working

Flat pricing has no expansion mechanism. Every customer pays the same, so growth must come entirely from new logos — which shows up as NRR capped at 100% and a revenue model that stalls as the addressable market saturates.

It also misprices at both ends. A ten-person team and a two-thousand-person enterprise derive wildly different value from the same product; one is being overcharged and the other is a bargain. In practice the small customer churns and the large one is under-monetised.

And where cost of service scales with usage — infrastructure, AI inference, data processing — flat pricing means your heaviest users are your least profitable. That is survivable at small scale and structurally dangerous at large scale.

The usual evolution

Most B2B SaaS companies start flat and add a scaling dimension as they mature: seats, usage, or a tier structure. The migration is the hard part, since existing customers are on a model you are trying to leave — which is why grandfathering exists.