| Definition | Set price for services regardless of usage | Price varies based on usage or volume of services |
| Pricing Structure | Fixed fee per service or contract | Per unit, per transaction, or usage-based fee |
| Predictability | High predictability for budgeting and forecasting | Less predictable, can vary with service usage |
| Revenue Stability | Stable revenue for the provider | Revenue fluctuates with service demand |
| Cost Control | Easy to manage and forecast costs | Costs can fluctuate based on service usage |
| Risk Management | Provider assumes most of the risk | Risk shared between provider and client |
| Client Budgeting | Easier for clients to budget and plan | Harder for clients to budget due to variable costs |
| Scalability | Less scalable with increasing service volume | Scalable as pricing adjusts with usage |
| Client Cost Exposure | Predictable and stable costs for clients | Clients face variable costs that can be high or low |
| Profit Margins | Can be lower if fixed price is not aligned with costs | Potential for higher margins with high usage |
| Administrative Complexity | Lower complexity, simple billing | Higher complexity due to tracking and billing based on usage |
| Flexibility | Less flexible, set rates do not adjust with market changes | More flexible, adjusts with service demand |
| Market Competitiveness | May be less competitive if rates are higher | Can be competitive if pricing is aligned with client usage |
| Client Acquisition | Attracts clients looking for predictable costs | Attracts clients who prefer to pay based on usage |
| Revenue Forecasting | Easier to forecast revenue | More challenging to forecast due to variable nature |
| Examples | Subscription-based services, flat fees | Pay-per-use services, tiered pricing models |
| Risk Sharing | Provider assumes risk of cost overruns | Risk is shared with the client based on usage |
| Administrative Costs | Generally lower administrative costs | Higher administrative costs due to tracking and invoicing |
