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The Role Forward: A Strategic Finance Podcast

The Shift From Subscription to Consumption-Based Pricing With Fivetran's VP of Finance, Kalor Lewis

Nov 10, 2021
Kalor Lewis, Fivetran's VP of Finance, discusses the challenges and advantages of transitioning from subscription-based to consumption-based pricing. They explore aligning pricing with customer value, collaboration between teams, and the process of transitioning to the new model.
21:19

Episode guests

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Quick takeaways

  • Transitioning to a consumption-based pricing model helped Fivetran align pricing with customer value and accurately measure utility.
  • The switch to consumption-based pricing required adjustments in billing systems, salesforce implementations, and collaboration between finance, engineering, and product teams.

Deep dives

Transition from Subscription to Consumption-Based Pricing

The podcast episode discusses the transition of 5Tram from a subscription-based pricing model to a consumption-based pricing model. The switch was driven by the need to align the pricing with the value customers were receiving. The new model measured the volume of data moved, which was a better measure of the utility customers got. While the consumption-based model had advantages, such as aligning with market standards and measuring customer benefits accurately, it came with operational challenges and unpredictability for customers. The finance team played a crucial role in the decision-making and understanding the financial impact, collaborating closely with product and engineering teams.

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