FA-301c · Module 1

Value Metric Selection

3 min read

The value metric is what you charge for — per seat, per transaction, per GB, per API call, per revenue managed. The right value metric aligns price with the value the customer receives: as they get more value, they pay more. The wrong value metric creates misalignment: the customer gets enormous value but their usage of the metric stays flat, or the metric scales faster than value, creating churn pressure.

Do This

Choose a value metric that scales with the customer's success: revenue managed, users activated, outcomes delivered
Validate that the metric is measurable, predictable, and understandable by the buyer
Test that the metric creates natural expansion: as customer grows, their metric grows, their bill grows
Ensure the metric does not penalize early adoption — front-loading cost kills activation

Avoid This

Price per seat when value comes from automation (fewer seats = more value = less revenue)
Use a cost metric (storage, compute) as the value metric — cost and value are not correlated
Choose a metric that is difficult for the buyer to predict — budget uncertainty creates procurement friction
Change the value metric frequently — pricing stability builds buyer confidence

Value Metric Evaluation:
──────────────────────────────────────────────────────
Metric        Scales w/   Measurable  Predictable  Score
              Value?
──────────────────────────────────────────────────────
Per seat        Weak        Yes         Yes         5/10
Per user        Medium      Yes         Yes         7/10
Per revenue     Strong      Yes         Medium      8/10
Per API call    Weak        Yes         No          4/10
Per outcome     Strong      Medium      Medium      7/10
Flat rate       None        Yes         Yes         3/10
──────────────────────────────────────────────────────

"Per revenue managed" scores highest:
scales with value, measurable, reasonably
predictable. Natural expansion as customer
grows. Natural contraction if value decreases.