Around 42% of companies experience some level of revenue leakage, according to a report from MGI. Revenue leakage is the term used to describe businesses failing to collect all revenue due to them. For instance, they may under-bill a customer, or fail to bill them for products they’ve received or services they’ve used.
Forty-two percent seems like a considerable amount of businesses that are missing out on revenue. But, just how much revenue are they leaking? There are various statistics on this subject, but the general estimation seems to be around two to five percent of total revenue. This estimation certainly appears to be the figures that most businesses accept and for which they make allowance. If you’re turning over $1M per year, $50,000 is being left on the table. Can your business afford to give away $50,000?
What Are The Causes Revenue Of Leakage?
To meet customers’ changing needs, billing models become more complex. Billing is straightforward when you are selling individual products through one-off transactions or simple subscriptions. However, introducing usage-based billing, unique plans, or à-la-carte services, things quickly become more challenging to keep track of.
Using outdated systems or, even worse, using a manual spreadsheet-based system, increases such challenges exponentially. These legacy and manual systems were not designed to handle the complexity of today’s customer-focused billing models. They are seldom able to track which customers are using services regularly or adjust invoices to a particular set of circumstances. Keeping catalogs up to date with current prices also proves difficult or unachievable for legacy and manual systems.
The result? Once again, you will lose revenue, opportunities, and customers.
How Can You Avoid Revenue Leakage?
Expanding companies have the opportunity to take advantage of intelligent billing platforms, such as Tridens Monetization. These platforms will help you maximize your potential through efficient, accurate, and leak-eliminating usage-based billing.
Tridens Monetization can help your company by making sure that you do not leave money on the table. Here are a few ways how we do that:
1. Usage-Based Models
Tridens Monetization’s intelligent billing platform was built with a rating engine, which enables you innovative usage-based pricing. This engine converts data relating to usage into prices, ready to go straight into invoices. It does this across various billing models, based on customers’ needs and the requirements of particular products or services. The system can eliminate issues dealing with a host of pricing models, including allowances, flat fees, family plans, multi-dimensional models, tapers, tiers, time-based pricing, or any combination of these.
Your business will experience an increase in customer lifecycle through automated renewals, and increased opportunities cross-selling and up-selling.
2. Flexible Product Catalog
Updating pricing models or product catalogs on a legacy or manual system requires a considerable amount of guidance and support, quite often from a technical billing expert. Our intelligent billing platform comes with a flexible catalog for products and services. This catalog will support your billing models as they evolve with your business’ growth. It will help ensure that you eradicate missed revenue events, missed cross/up-selling opportunities, incorrect orders, SKU proliferation, product cannibalization, and customer confusion. Tidens Monetization’s intelligent billing platform can immediately update your pricing models, avoiding the gaps and errors you will experience with a legacy or manual system.
3. Real-Time Analytics & Reporting
Lack of transparency is one of the leading causes of revenue leakage. Legacy and manual systems provide you with a limited view of behind-the-scenes activity. So, it is challenging for your finance team or customer service department to spot errors before they develop into significant issues. Our intelligent billing platform provides crystal clear vision and analytics reporting in real-time.
These aspects of the Tridens Monetization system means that you can be sure that everything is running just as it should be. You will have advance notice of any potential customer dissatisfaction and respond accordingly to rectify the situation, reinforcing loyalty, and increasing revenue-creating opportunities.
If your business is suffering from revenue leakage or, even worse, if you are unaware that you have revenue leakage, get in touch with Tridens Monetization today and arrange your personalized demonstration of our intelligent billing platform.