When it comes to recurring revenue, simple subscription models are the old standby. Customers pay a predetermined amount per month, quarter, or year and receive a steady stream of goods or services in exchange. Businesses and investors alike love the predictable nature of the revenue, while customers are hooked on the convenience of the “set it and forget it” model.

But simple subscriptions aren't the end-all, be-all — far from it. While the recurring revenue is a must-have, the model puts a pretty hard limit on a business’s earnings. And while customers do love the convenience, subscription fatigue is a real threat as we all start looking more closely at what we’re spending every month — and how much of what we’re paying for we actually use.

Does this mean businesses ought to revert back to one-off sales and give up their recurring revenue?

Not at all.

Instead, we suggest pairing those simple subscriptions with consumption-based models that allow customers to pay a low rate for basic access and then add on — and pay for — only what they need. This opens doors to countless cross-sell, upsell, and bundling opportunities while assuring buyers that they’re getting value out of every dollar they spend.

So, how does it work?

Maximize Revenue with Dynamic Monetization

Business experts Michael Dell and Peter Drucker are both credited with some variation of the idea that “anything that can be measured can be improved.” Well, with apologies to both of them, we’d like to offer a revision:

Anything that can be measured can be monetized.

Say your simple subscription offers users 100 gigabytes of data for $30 per month. That’s $360 per customer, per year. Not too shabby. But if the simple subscription is all you have to offer, then that’s a hard upper limit. But what if you considered how to monetize your services (in this case, data) beyond that 100 gigs per month? For example:

  • Overages: Rather than cutting off the service once the 100 gigabytes were used, what if you allowed customers to go over for an additional fee? This keeps the lights on for your customers and raises your business’s revenue ceiling. (Adding rollovers, too, can reward customers for coming in under the bench line and help them feel the weight of the value their money buys.)
  • Additional Users: How many “seats” or users are included in that $30 per month? Offering customers the opportunity to add another for an additional fee expands usage and boosts revenue.
  • Tiers & Tapers: Tiers and tapers can be used in conjunction with simple subscriptions (add on another 100 gigs at a lower rate, or 200 at an even lower rate) or on their own, encouraging users to buy more products or services at a lower cost per unit.

These are just a few of the usage-based models that, in conjunction with simple subscriptions, can drive significant revenue growth and increase the customer lifetime value. (Learn about other common models in our recent blog post, and use our Intelligent Billing and Revenue Explorer to see the potential for yourself.)

Monetize Data Instantly

All that sounds well and good, but how do you go about monetizing anything you can measure? It starts with a usage and rating engine that’s capable of processing large-scale usage events through an unlimited number of complex rating rules. In other words, no matter how many active customers you have, and no matter how varied, customized, or complex your billing models, your rating engine can convert usage data into standardized dollar amounts to generate clear and accurate invoices based on each customer’s particular plan. The process of converting data is called “mediation,” and we’ve got an overview for you here.

What it boils down to, though, is that as long as you can measure how much and how frequently customers are consuming your products and services, the billing opportunities are all but limitless. At Gotransverse, we’re excited to help you bring those opportunities to life. Our real-time rating engine converts anything that can be measured into revenue for your business, and it's strong enough to handle the most sophisticated models with ease. In short, Gotransverse consumes the data created by your product, application, or service, and sends an invoice to your customers. It's as simple as that.

To learn more about the Gotransverse platform — and how it can help your business go beyond simple subscriptions to move the revenue needle in the right direction — we invite you to take a virtual tour of our platform today. Then, when you’re ready, request a demo to speak with one of our experts about whether Gotransverse is right for your organization.