Our business relies on usage-based transaction fees rather than fixed SaaS subscriptions, which has buyers treating our revenue as volatile and discounting our multiple. How do we use our operational metrics to prove this usage-based revenue is highly predictable and deserves to be valued as recurring contract value?

Question

Tyler Smith · Accepted Answer

Buyers naturally prefer fixed SaaS subscriptions because the cash flow is highly predictable. However, if your business relies on transaction-based or usage-based fees, you do not have to settle for a discounted services multiple. You can prove your revenue is sticky by showing how deeply your operations are integrated into your customers' daily workflows.

Start by showcasing your customer retention metrics and historical usage patterns. Use your weekly scorecard data to build a cohort analysis that proves once a customer starts using your service, their volume remains stable or grows over time. Show that your delivery is managed through systemic processes that make it operationally painful for a customer to switch to a competitor.

Additionally, document your customer onboarding process in your operational manuals. Prove that your team can consistently onboard and scale customer usage without manual intervention, which demonstrates software-like scalability. When you show that your customer lifetime value is high and your churn is low, you shift the conversation from transaction volatility to predictable, recurring demand.

Your recommendation is to present your usage-based fees as contractually committed operational volume rather than discretionary spending. Back this up with multi-year contract terms and historical usage consistency to demand a premium recurring revenue multiple.