Input based pricing vs Output based pricing

Usage based pricing is being talked about a lot lately. Partly due to changing unit economics for software but also because its trendy right now. One discussion I've had several times recently is about the difference in pricing user inputs and pricing user outputs. Both fall into the world of 'usage based' prices but they're perceived quite differently by customers and can shape your business in meaningful ways.Within the two pricing setups below they can both be setup in many ways. You can charge purely on use (1 unit = $1) or in more complex ways like tiered usage (units are cheaper the more you use) or in allotments (500 units a month on your subscription). These changes are a separate arm of pricing and don't really change the differences below.Input based pricingThis form of pricing charges the user for the consumption of some resource. Users pay per unit and presumably use that resource to go and do something. Examples of this might be API calls or number of contacts in a CRM.…