JAN 21, 2020
By Drewe Apps
Grow Your Business by Diversifying Your Billing Model
It is now even more imperative for businesses to engage with customers on a personal level, and to offer alternative billing models, in order to better service customer's needs, and to ultimately grow the relationship, in turn leading to a potential increase in revenue.
Gone are the days of the traditional billing model of charging the customer up-front and moving on to the next sale. Due to the likes of Netflix and GoGet, billing models such as Subscription Billing and Event Based Billing are now expected in both B2C and B2B.
Examples of alternative billing models:
- Subscription Billing - The act of billing a customer on a time determined basis for products or services
- Event Based Billing - The act of billing a customer based on their usage (or the outcome) of a product or service
Netflix brought subscription billing to the masses, whereas GoGet brought both subscription and event based billing to city dwellers who require a vehicle but don't wish to own one.
Benefits of diversified billing models
Diversifying your business's billing model, with the likes of subscription billing and event based billing, can have a positive impact on your business, with benefits such as:
- Improved Relationship - Due to the need to more regularly bill the customer for products or services, this can foster the relationship between your business and the customer.
- Increased Customer Lifetime Value (CLV) - Due to the improved relationship with your customer, and the higher frequency of communication, the chance to offer upgrades and add-ons increases.
- Increased Sales & Market Share - Due to the shift in consumer needs and expectations, with regard to payment options and billing models, offering subscription billing and/or event based billing options can increase sales and your business's market share.
Both subscription billing and event based billing models are perfectly suited for telecommunication companies and connected device manufacturers. These billing models open up new sales channels, in order to take advantage of the benefits outlined earlier.
For example, offer devices at no or a low up-front cost, or on a month-to-month basis, and then simply charge based on usage of the device. In the case of a device that monitors livestock movement, the device manufacturer could charge the farmer in either of the following ways:
- Subscription Billing: $0 up-front, $20 per month / monitoring device, unlimied reports
- Event Based Billing: $0 up-front, $10 per month / monitoring device, $20 per report produced
- Subscription Billing + Event Based Billing: $0 up-front, $5 per month / monitoring device, $5 per report produced
Diversifying your billing model is easy!
It's never been easier to diversify your billing model. Simply think about what cost you can offer (up-front and over a specific term) in order to retain your profit margin, what your customers are willing to spend (how often and for how long), then seek the best billing platform to suit those needs.
ECConnect is a widely-respected industry leader in the Telecommunications, Utilities, IoT and Connected Device markets, providing award-winning customer management, service provisioning, and fully-automated high quantity billing systems to business all over Australia via our SAAS platform 'EAP'.
EAP's Product Module takes care of subscription billing, while EAP's ECBill Module takes care of event based billing. These two modules can be used separately or in conjunction with one another.
Lastly, when considering a billing system for your business, check out The Top 5 Things to Consider When Choosing a Billing System.
Interested in using EAP to diversify your billing model? Reach out today!
Chief Commercial Officer