There has been an increase in the adoption of recurring revenue models in both B2B and B2C environments as enterprise companies search for new ways to stay competitive by monetizing their products and growing revenue. According to Forrester Research, “the move to subscription and consumption models is pervasive in almost every industry,” so the number of businesses embracing these models is expected to steadily rise. Do you (or could you) offer a service where usage or consumption could vary widely?
Over the years, we’ve seen the traditional one-time sales model evolve into some version of subscription or usage-based models. Even Apple jumped on the bandwagon with the unveiling of its iPhone Upgrade Plan last year. Rather than purchasing the newest model for a discounted price upon signing a two-year contract, this new offer allows users to pay monthly for the device, with plans starting at $32/month and an upgrade option every 12 months. Because the upgrade cycle for the iPhone has increased (jumping from 22 months to 26 months since 2013), offering an upgrade every 12 months can potentially reverse that slowing trend. The iPhone Upgrade Program also allows Apple to compete against and disrupt the wireless carriers, all of which offer installment plans for iPhones.
More recently, we’ve seen an increase in usage-based, or consumption, billing. This model allows customers to pay only when they receive benefit from the product or service. It’s no surprise that in an era where customers demand and desire to pay only for what they use and consume, the usage-based billing model is increasingly popular and preferred.
Yet usage-based billing often involves complex hybrid models, as they require support for account hierarchies, product catalogs, sales channels, etc. As a result, we’ve seen a growing need for providers that support complex usage-based billing options. If you’re looking to eliminate manual, error-prone processes as your business scales, find a solution that supports usage-based billing while integrating with your existing legacy systems.
To start, check out this infographic. It breaks down 3 benefits of usage-based pricing and packaging to help you “Capture Untapped Markets with Usage-Based Billing.”
Embed This Image On Your Site (copy code below):