Pricing Model

The computational rulebook that operates against the chosen value metric, governing how revenue is captured and converted into a rational net price on every invoice. The pricing model's job is to compute that net price for every combination of what you sell, at every volume you sell it at, consistent across every deal. Pricing model covers price setting (what the unit prices are), discount rules and parameterized adjustments (approved tiers, volume breaks, multi-year commitments, renewal mechanics), incentive structures (loyalty pricing, promotional pricing, early-pay terms), calculation uniformity (how prices are computed consistently across deals, customer sizes, and geographies), and the limits that constrain it all (floor prices, maximum discounts, approval requirements). What the pricing model is NOT: usage-based, credit-based, outcome-based, subscription, and their hybrids are licensing-metric families — they describe the unit the price attaches to and live inside the licensing model decision. The industry collapses those into "pricing model types," which is the single biggest source of pricing-vocabulary confusion. SPP keeps them separate.