Monday Price Point:​

Credit Systems is a powerful pricing modality - the other 'modalities' being flat fees, licenses and usage based pricing.
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Credit systems work like this:
1) Buy credits upfront
2) Spend credits to use the product.
3) Unused credits roll over to the next period.
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The best known example is Audible.com that sells audiobooks with credits.
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I call it usage-based pricing, paid upfront.
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It is a powerfull model because it combines the great upfront cashflow of license models with the 'only-pay-for-what-you-use'-psychology of usage-based models.
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Also, Credit Systems have 2 other major psychological benefits:
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FIRST they separate the time of payment from the time of purchase.
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Let me explain:
1) Customers buy credits thinking 'I will use these prudently'.
2) Customers spend credits like they got them for free.
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Because in a way they did. They are already paid for, so at the time when I'm considering doing something that would cost me credits - at that time it costs me no actual money.
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Which is the major drawback of usage based models: customers curb usage because they know it costs them money. In a very small but real sense there is some form of pain involved in usage based modalities (technically the term is actually called Pain of Payment - and it lights up real pain centers in the brain).
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SECOND customers know upfront what it will cost.
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If I buy 10,000 credits for $10,000 for the year... I have a sense of control in knowing that I will be prompted for a decision to spend more if ever I spend more than that.
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Just like license based models where I buy a use-right to, say, 10,000 tracks/look-ups/user-seats etc.
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The only major drawback (and it is major) is that credit systems tend to be more complex than license or usage based. And too much complexity kills any deal.
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How to do it:
If you are considering a credit system, you must answer these question:
1) Can credits buy one thing or several things? (Single or Multi purchase systems)
2) Can you actually measure, track and invoice the stuff credits buy?
3) How will users keep track of credits?
What is the base-price of a credit? $1 = 1 credit?
4) How will discounts work? $1 = 1 credit... and $10,000 = 20,000 credits?
5) Will credits expire? When?
6) How is it determined how many credits customers buy at the beginning?
7) How is it determined how many credits customers buy at renewal?
8) What happens if customers run out of credits during the year?
9) Who in the customers organisation can approve to buy more credits?
10) What happens if customers churn? Are credits paid back in $?
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Design it. Then show it to customers. A lot. Whenever you have a hard time explaining something - make it simpler.
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Then launch it. Start with new customers. It is perfectly fine to handle the counting and billing of credits manually in a spreadsheet to begin with (e.g. 2-3 months) before you spin up a system.
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Every Monday: a point about pricing that could change your business

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