You've seen it happen. A prospect signs up for your SaaS product, gets excited during onboarding, then hits a wall. They start calculating credits. Worrying about tokens. Wondering if they'll run out before getting real value.

They churn before they ever become a real customer.

This is the hidden tax of credit and token-based pricing. And here's the bold prediction: it's on its way out. Completely.

The Legacy Problem: Where Credits and Tokens Actually Come From

Credits and tokens didn't emerge from customer-centric thinking. They emerged from cost-plus accounting.

When SaaS companies started building on top of APIs: OpenAI, AWS, Twilio: they inherited the backend billing model. API providers charge per call, per token, per unit of compute. SaaS founders, looking for the "easy" solution, simply passed those costs to customers with a markup.

Cost-plus pricing for software. That's it.

The logic seemed sound: "We pay per API call, so customers should pay per credit." But this approach ignores a fundamental truth about customer behavior. Customers don't buy API calls. They buy outcomes. They buy problems solved.

When you force customers to think in credits, you're forcing them to think about your costs instead of their results. That's backwards.

Why Credit-Based Models Are Killing Your Metrics

Let's talk about what credit and token pricing actually does to your business:

Onboarding friction skyrockets. New users can't explore freely. They're constantly doing mental math. "Should I use a credit on this? What if I need it later?" Hesitation kills activation.

Churn becomes structural. Customers who run out of credits face a decision point every month. Even satisfied customers question whether to continue. You've built churn triggers directly into your billing cycle.

Support tickets multiply. "How many credits does this feature use?" "Why did I run out so fast?" "Can I get a refund on unused credits?" Your support team becomes a billing department.

Expansion revenue suffers. Instead of expanding usage naturally, customers optimize for credit conservation. They use your product less than they want to: which means they get less value than they should.

Recent 2024–2025 research points in one direction: simple, value-aligned pricing outperforms credits and tokens.

• 78% of SaaS now use value-based or flat/unlimited pricing, with higher satisfaction and retention compared to credit/usage models [1].

• Flat/tiered pricing outperforms credits/usage on unit economics: 32% higher NRR and 41% lower CAC across cohort analyses [2].

• Friction at onboarding kills adoption: 74% of users will churn for an easier setup and buying experience [3].

• Academic and behavioral research echo this: complex pricing/onboarding increases abandonment and undermines retention [4][5].

• ChartMogul’s 2024 retention report shows retention/expansion is the growth lever, and achieving >100% NRR is getting harder—so adding pricing friction is the last thing you can afford [6].

The takeaway is clear: complexity creates churn. Predictability and outcome-based value win.

Our Experiment: From Credits to Unlimited

We don't just theorize about this. We tested it.

One of the SaaS products in our portfolio: an AI-powered blog writing service: ran on credit-based pricing. Standard model: buy credits, use credits, buy more credits.

The metrics were fine. Not great. Conversion was acceptable. Churn was "normal" for the category.

Then we ran an experiment. We eliminated credits entirely and moved to a simple unlimited monthly subscription.

The results:

• 48% improvement in front-end conversion. Nearly half more visitors became paying customers.

• Faster onboarding. Users engaged with the product immediately instead of rationing their usage.

• Churn cut in half. Retention strengthened because customers weren't hitting artificial decision points every billing cycle.

Same product. Same features. Same target customer. The only change was removing the friction of credit-based pricing.

This wasn't a marginal improvement. This was a fundamental shift in unit economics.

The Industry Is Already Moving

In the last year, the center of gravity shifted.

• Value-based and flat/unlimited options are now the norm (78%), not the exception [1].

• Companies that moved off credits/tokens to flat or value tiers saw cleaner activation and stronger retention—see Conversion Rate Experts and M3ter [2].

• Enterprises want budgetable numbers. Hybrid models that pair a base subscription with generous included usage, with clear overage only for outliers, reduce evaluation risk and speed up deals.

Why it’s happening now:

• AI infra costs keep falling, eroding the cost-plus rationale for passing tokens to buyers.

• Boards and operators are re-centering on NRR. With >100% NRR harder to achieve in 2024 [6], you can’t afford pricing-induced churn.

• Buying teams are allergic to cognitive load. If the plan requires a calculator during a trial, it’s a tax on adoption [3].

This isn’t dogma. The win is predictability plus value alignment, proven in-market—not elaborate metering.

What This Means for Founders and Operators

If you're running credit or token-based pricing, you need to ask yourself some honest questions:

Is this pricing model serving your customers or your cost structure? If the answer is "cost structure," you're optimizing for the wrong thing.

What would happen if you ran an unlimited pricing experiment? Not as your main model: just as a test cohort. Would conversion improve? Would retention strengthen?

Are your support tickets about product value or billing confusion? If your team spends significant time explaining credits, that's a signal.

How do your competitors price? If they've moved to simpler models and you haven't, you're creating unnecessary friction.

The shift doesn't have to be all-or-nothing. Some companies successfully run hybrid models: base subscription plus overage for extreme usage. The goal isn't dogma. The goal is removing friction while maintaining healthy unit economics.

But the direction is clear. Credits and tokens are carryover from a cost-plus era. The future belongs to pricing models built around customer outcomes, not API costs.

Rethink Pricing Before the Market Forces You

Here's the thing about pricing evolution: early movers gain competitive advantage. Late movers play catch-up.

If you wait until credit-based pricing is universally seen as outdated, you'll be reacting instead of leading. You'll lose customers to competitors who figured this out first.

The best time to experiment with your pricing model is now: while you can test, learn, and iterate without existential pressure.

Start small. Run a cohort test. Measure conversion, activation, and retention against your current model. Let the data guide your decisions.

The SaaS pricing landscape is evolving toward simplicity, predictability, and customer-centric design. The question isn't whether credits and tokens will fade. It's whether you'll lead that transition or follow it.

Need a real-world, no-nonsense pricing experiment or GTM growth sprint? If you lead a SaaS or digital company facing a plateau in conversion, onboarding, or expansion, let’s talk. VentureLabbs specializes in fast, market-led experiments and strategic growth sprints—the playbook for founders who want leading, not lagging, signals. Reach out today, and let’s move your revenue strategy forward—before your competitors do.

References

1. Monetizely. SaaS Pricing Benchmark Study 2025: Insights from 100 Companies. https://www.getmonetizely.com/articles/saas-pricing-benchmark-study-2025-insights-from-100-companies

2. Monetizely. 5 In-Depth Pricing Transformation Case Studies. https://getmonetizely.com/blogs/5-in-depth-pricing-transformation-case-studies

3. Custify. SaaS Customer Onboarding and Retention Statistics. https://www.custify.com/blog/saas-customer-onboarding-and-retention-statistics/

4. Springer. Onboarding and Customer Experience Study (2025). https://link.springer.com/article/10.1007/s11747-025-01088-3

5. ResearchGate. The Impact of Pricing and Customer Engagement in Online Subscription-Based Business on Customer Retention (PDF). https://www.researchgate.net/publication/385922622_The_Impact_of_Pricing_and_Customer_Engagement_in_Online_Subscription-Based_Business_on_Customer_Retention

6. ChartMogul. The SaaS Retention Report: The New Normal for SaaS (2024). https://chartmogul.com/reports/saas-retention-the-new-normal/