Will the pay-as-you-go pricing model be the next big trend to hit major industries?
As a subscription, media, communication, and IoT service provider, you must stay connected with industry trends and standards to remain relevant. Therefore, we have decided to analyze the consumption-based pricing model and what it would require to transit into a usage-based service successfully.
Skype were among the early pioneers of per-user, per-month pricing in the software industry. Currently, several industry leaders are now looking for something more than a simple subscription model. Consumption-based offerings seem to be the next norm as companies are looking to move from flat-rate monthly fees to pay-as-you-go pricing. If you are looking to break into the market with usage-based pricing, then keep these four factors in mind to avoid some common mishaps:
Managing Usage
Advanced billing capabilities are integral to providing a pay-per-use billing model. To create a thriving consumption-based business, you will need to be good at calculating usage, managing customers, and billing operations.
You must identify a billing model that can grow with your business. Carefully consider each of your vendor’s ease of integration, future development roadmap, and current carrier provisioning. The goal is to find a partner that can adapt and develop with your business.
Avoid Bill Shock
Reduce the chance of a higher than usual billing by sending notifications in real-time and offering your customers an opportunity to view usage, monitor new orders, and create supporting tickets via a self-service portal. Also, ensure that the customer portal can allow customers to generate and view reports. Besides avoiding bill shock, these customer portals can also lead to better customer satisfaction and loyalty.
Revenue Prediction
The good thing about subscription services is that they make it easy to predict future revenue. If you offer a pay-per-use service, it is important to consider setting a minimum monthly charge. Standardizing your income by adopting a minimum monthly fee will allow you to accurately estimate your expected revenue and offer a fair estimation of your organization’s financial status.
Consumption Based Technologies
Your progress will largely be determined by the technology you adopt. Conventional flat-rate pricing models require an entirely technology from consumption-based pricing solutions. Before opting for features like back-office software and new or enhanced billing, ensure that you have a platform that supports automated rating, real-time usage, billing flexibility, and an in-built tax calculator. The ideal usage-based billing system should work in tandem with the services you provide while making the monetization process for your pricing model easier.
Your success should not be based on a trial and error approach. It is vital to partner with the right technology provider to ensure a seamless pay-as-you-go strategy adoption.
Tridens Monetization offers a comprehensive quote-order-cash billing that can handle your customer management, online rating, billing, tax calculation, revenue management, reporting & analytics, and tracking needs, amongst others. We would be more than willing to help you disrupt the market. We operate a usage-based cloud billing platform that is ideal for both IoT and subscription-based service providers looking to scale their quote-order-cash processes. It’s not a question of if, it’s a question of when. So, when can Tridens Monetization elevate your business to the next level?!
