Charging your customers for what they consume has been one of the most effective strategies and pricing models when it comes to the other pricing models of B2B and SaaS marketplaces.
As it is known synonymously with a consumption-based pricing model, it is a faster way to get paid quickly and side by side, giving your customer a remarkable user experience. In addition, usage-based billing software helps B2B SaaS businesses and companies to regulate their metered billing model seamlessly.
As the title suggests, the usage-based billing model needs to be optimized with the new trends and techniques used in SaaS and B2B tech. In addition, the world is moving quickly, and customers are wising up with every passing day. Therefore, providing your customers with a more apt strategy is better.
In this article, we will look at how you can optimize your usage-based billing model – leaving the traditional practices of the usage-based billing model behind.
Understand your value metric
Value metrics are the core features customers look for in the market, available at competitive prices. So the most important thing is to understand the competitive market and ‘your’ value metric that will attract customers in the industry you provide services.
For your value metric, there are multiple factors that you can sell to the customers. First, they can be users (the number of users your customer can add). The next one is the amount of data that your users will need. And the last one is events, in which the number of times an event can be processed using the software.
Having your value metrics set can gain potential revenue for your business – optimized perfectly. Usage-based billing software can help you manage your value metrics along with the pricing or add-ons that you might add to your product features.
Mediate the consumption of users
Mediating users’ consumption entails collecting, cleaning, and routing the usage records of your business using the software. Mediating users’ consumption optimizes usage-based billing as you start to collect the data, record, and track the data. However, mediating users’ consumption can be difficult for a large customer database. Hence, subscription management software that track, monitor, and analyzes the collected data can be the right choice to manage your usage-based billing feature.
Mediating the consumption of users is important for accurate billing and invoicing. Not tracking the usage with the right metrics and software can either cause you a loss in revenue or overcharging your customers can lead to losing your customers.
Hence, mediation of the data and consumption will optimize your usage-based billing strategy and make you more tech-savvy, powered by automation.
Offer Add-Ons To Your Usage-Based Billing Model
Another way to optimize your usage-based billing model is by offering add-ons to your customers. Offering add-ons to your customers add more value to the features and product. For example, with a subscription management platform, you can add features to the consumption-based billing model and generate optimized revenue.
Check For Cost Effectiveness And Marginal Costs
Before you launch the usage-based pricing model for your customers, you must check the marginal costs and profit it will give you.
Launching a consumption-based pricing model needs companies and businesses to take all the cost factors in so that the company earns revenue. If you need a fixed recurring revenue, then using a usage-based pricing model for our business might not be effective.
Software to Use for achieving optimized consumption-based pricing model
If you are looking for software that can manage and optimize the usage-based billing model for your business, then SubscriptionFlow is the right choice for your usage-based billing software.
SubscriptionFlow is a subscription management software that renders its services for different billing and pricing models. The subscription software for B2B and SaaS businesses provides multiple features powered and fueled by automation. Not only this but real-time analytics and tools also help generate useful insights.
Send automated bills and invoices with the software to your consumption-based pricing models and reduce manual labor.