Seat-Based Pricing Calculator
Revenue from seat-based pricing — with volume discounts, seat growth, and what happens when customers stop adding people.
Seat pricing scales revenue with a customer's headcount, which is why it expands naturally and why it stalls when they stop hiring.
How the seat-based pricing calculator works
Seat pricing scales revenue with a customer's headcount, which is why it expands naturally and why it stalls when they stop hiring.
Volume discounts complicate it: tiered pricing means the marginal seat costs less than the average, so a customer doubling from 50 to 100 seats often adds far less than double the revenue. This models the tiers explicitly.
Formula: revenue = Σ(seats in tier × tier price)
Worked examples
| Inputs | Monthly revenue | Note |
|---|---|---|
| 120 seats with two discount tiers | 2,568.75 | effective price well below list |
| A small customer | 500 | pays full list price |
| No discounts | 3,000 | linear pricing |
FAQFrequently asked questions
Why use seat-based pricing?
Because revenue expands with the customer without renegotiation, and the value is easy to explain.
What is the drawback?
It penalises adoption. Customers ration seats to control cost, which limits usage and makes the product easier to remove.
How do volume tiers work?
Each band of seats prices at its own rate, so the marginal seat costs less than the average. This models the tiers explicitly.
What is a typical discount curve?
Commonly 10 to 20% above the first tier and 25 to 40% for enterprise volumes, though it varies enormously.
Should I switch to usage-based?
Usage pricing aligns cost with value and expands without headcount growth, but it makes revenue less predictable. Many products now run a hybrid.
Where these figures come from
- Reichheld (2003), Harvard Business Review — The One Number You Need to Grow — the paper that introduced Net Promoter Score
- Financial Reporting Council — the UK accounting regulator
Last checked: September 2026. These are the industry-standard definitions; where companies commonly disagree, the page says so.