EMMANUEL PASQUET
Approx. reading : about 8 min
The tech industry is moving away from traditional business models towards flexible, consumption-based billing, especially in the Software as a Service (SaaS) industry.
This decision has benefits for businesses and customers:
Customers, on the other hand, can increase or decrease the use of their services according to their needs and adjust their expenses to their actual use.
However, for a SaaS provider to take advantage of this usage-based billing model and provide their customers with an optimal experience without breaking the bank, SaaS vendors must ensure that they have implemented the five best following practices.
Basically, usage-based billing with SaaS allows a customer to directly connect what they pay to the value they get from your services. To do this, customers must be able to easily understand the services they receive and relates these services with the value they get and pay for.
Make sure your pricing model makes sense for your customers. They should be able to configure the pricing scenario that they consider “natural” to take because it is fully connected with their vision of the value your service delivers.
Forget the “one-size-fits-all” approach with your pricing. Create modularity and flexibility that will better fit with the value that your customer get from your services. Make it simple to subscribe and unsubscribe too. You need to leave them with a feeling of control on what they pay.
Make it flexible but keep it simple. A complex pricing model can lead to frustrated customers, disputes, increased customer support requests, and more churn.
When you generate an invoice, you want the customer to pay as quickly as possible. For this, your recurring billing management system must be equipped not only to bill your customers when payment is due, but also to present their usage levels to them in a simple and understandable format.
Your recurring billing management solution should handle all of this work for you, providing out-of-the-box processes and features that reduce potential roadblocks.
This includes both the dunning functionality and the ability for your customers to make a payment using a range of different payment methods, such as prepayments, online, direct debits and digital wallets.
You might even consider giving customers the ability to adjust billing dates from their customer self-service area. Considering your customers’ payment preferences can help strengthen their positive experience with your platform.
Of course, customer demand can fluctuate over the course of a year or even a season, depending on different market forces or trends.
Regardless of the timeframe, make sure you leverage your solutions’ usage data by your customers to refine your business approach and even your pricing model. In addition, all of a customer’s usage data can help your marketing teams come up with suitable and new solutions that will help increase the average basket.
For example, use your customers’ usage statistics to:
Your business systems collect a lot of data about your customers and how they use your services. You can use this data to better understand and track your customers’ trends and the impact your billing and pricing changes will have on them.
A good recurring billing management system can help you predict the impact your billing changes will have on customer product requests over time. It should help your marketing teams project the impact of price changes on usage and even retention.
It should also allow you to limit your involuntary CHURN by helping you improve your payment collection processes, set up proactive customer reminders, etc. in order to limit payment failures.
An analytic dive into your business metrics and the analysis of what is happening with your customers are powerful tools and their use should be an integral part of the management of the subscription plans developed by your company.
Providing a service without getting paid is the antithesis of a usage-based billing model – or any business, for that matter.
Make sure your recurring billing management tool has the ability to collect payments dynamically while providing the ability to proactively communicate with your paying customers in the event of an incident.
A recurring billing management solution must be equipped with appropriate functionalities allowing you to at least:
As a SaaS businesses, if you want to take full advantage of a usage-based billing model, you need the right system for managing subscription and recurring billing.
The solution will not only automate key invoicing processes, but it will also allow businesses to focus on growing faster. They will also be able to focus on improving the customer experience instead of wasting their time with tedious manual processes.
The right susbcription and recurring billing management solution will also offer the capacity to track and use data to identify opportunities to improve customer engagement or to adjust offerings at every stage of the customer journey.
Dotsha susbcription management and usage-based billing platform can help you deploy the agility you need to maintain your competitive advantage for years to come.
Dotsha delivers the first subscription-to-cash automation platform designed to put every subscription-based or usage-based business on autopilot … from early subscription to cash collection!
Your business can scale fast without turning its back-office into a mess!
Keep growing faster… we’ve got your back !
All-In-One platform that unify {Pricing}+{Check-in}+{Billing}+{Payments}+{Dunning}+{Reporting} while the MRR just keeps growing, Dotsha’s plaform is an easy to use and quickly implemented cloud-based platform that augment your existing information system with robust API integrations in order to deliver optimal automation with minimal code. You will forget we are there!
EMMANUEL PASQUET
Approx. reading : about 8 min
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