Price with Expandable Consumption in Mind
When I began my career at Gillette, we studied something called Expandable Consumption.
It’s a fancy term for a simple truth: Give people more, and they’ll use more.
If you had just two razor cartridges, you’d treat them like gold. But a 10-pack? Suddenly swapping after three shaves didn’t feel so extravagant. Same product. Same person. Different behavior.
That lesson stuck with me. And lately, I’ve been thinking about it in the context of AI credits, seat pricing, and feature bundles.
For startups selling usage-based products, the question isn’t just: How much should we charge?
It’s: How are we shaping consumption?
The Psychology of Abundance
Expandable consumption isn’t about gaming your customers. It’s about recognizing that abundance nudges behavior.
When users feel constrained, they ration. When they feel abundance, they explore.
And exploration is where habits form. Where value gets discovered. Where usage builds momentum.
If your pricing model makes customers feel like they’re tiptoeing through a minefield of limits, they won’t build the habit. They’ll build caution.
Scarcity vs. Stickiness
Scarcity—like offering just two credits—leads to rationing, hesitation, and delayed engagement. Customers tread lightly, unsure if they can afford to explore.
Abundance—like offering ten credits—invites exploration, testing, and repetition. Customers feel safe to dive in and discover value.
Unlock-once bundles often create a short-term spike in usage, followed by a fade. They don’t build habits—they build one-time curiosity.
But habit-forming access, where customers are gently nudged to return and engage, leads to steady growth and compounding behavior. That’s where retention strengthens and lifetime value increases.
Usage-Based Pricing: A Double-Edged Razor
Startups love usage-based pricing. It feels fair. Flexible. Scalable.
But it also comes with risk: If customers don’t use the product, they don’t pay. And if they don’t pay, you don’t grow.
So the real question becomes: Are we giving customers enough to build a habit and come back? Or so little they ration themselves into irrelevance?
Nudging Toward Momentum
Here are a few ways to apply expandable consumption thinking:
Offer generous trial periods that let users feel the full value before asking them to commit.
Design starter bundles with headroom—not just access, but room to explore.
Preview what deeper usage unlocks, so customers see what’s possible.
Use soft limits instead of hard stops. A gentle nudge like “You’re close to your limit—want to upgrade?” beats a brick wall.
Tie feature unlocks to behavior, not just payment. Reward usage with access.
The goal isn’t to flood the customer with features. It’s to create conditions where usage feels natural, rewarding, and worth repeating.
The Razor Rule: Same Product, Different Behavior
Let’s go back to the razor.
The cartridge didn’t change. The person didn’t change. The pricing did.
And that changed everything.
When customers feel like they’re hoarding credits, rationing seats, or tiptoeing around feature limits, they don’t build habits. They build friction.
But when they feel abundance—when they feel invited to use the product—they build momentum.
And momentum is what drives retention, referrals, and revenue.
Final Thought: Open the Door, Don’t Slam It
Sometimes the key to faster revenue isn’t locking up more features. It’s opening up the ones that bring people back.
Expandable consumption isn’t about giving away the farm. It’s about giving enough to make the farm feel worth visiting again.
So if you’re tinkering with pricing, ask: Are we nudging behavior that compounds? Or are we accidentally teaching customers to ration their way out of relevance?
If you’re into pricing psychology, habit formation, and commercial strategy that actually moves the needle—this corner of the internet might just be worth bookmarking.