Gotransverse
on
Feb 16, 2021
At Gotransverse, we look forward to MGI’s Monetize Forum every year. As MGI describes it, this annual event “aims to help organizations identify intelligent strategies, best practices, new tools, and partnerships to drive success in Quote-to-Cash.” In the wake of 2020 and with more challenges ahead for businesses in 2021, this year’s forum was a particularly powerful opportunity to get a look at how businesses are surviving — and thriving — despite the ongoing volatility.
This year’s virtual event was especially exciting for the Gotransverse team because we were logged in not only to learn but to support our Vice President of Marketing, Marni Burger, who spoke with MGI’s Managing Director Andrew Dailey on planning for the future through sophisticated monetization. Andrew began by busting the popular myth that subscription and usage-based pricing models are really reserved for modest-sized companies — in reality, they’re a powerful way for large, complex organizations to drive growth as well. Then, he and Marni touched on several topics that CFOs and CIOs need to understand as they take the first steps down the path of usage-based billing.
You can register and view the full conversation here, but here’s a sneak peek at what you’ll learn:
Every Industry Can Benefit from Subscription and Usage-Based Monetization
The first question Andrew asked was what changes Marni and the Gotransverse team had seen as usage-based and subscription models have proliferated over the last few months. The biggest change, Marni noted, was that while communications and media/entertainment companies were the pioneers of subscription and usage-based models, we’re now seeing a wide variety of industries embracing these new models and the tech that goes with them.
Marni noted that Gotransverse clients seeing great success from these strategies include a logistics company that works with merchants to bill based on how much warehouse space is being used in any given period, an energy company helping clients reduce utilities and telecommunications costs by billing based on consumption of services, and even an airport that is moving to usage-based billing for the airlines and merchants that occupy the facility.
Usage-Based Billing Supports Efficient, Accurate Business Forecasting
While recurring billing has the powerful advantage of predictability, usage-based models require forecasting based on consumption that may or may not actually take place. How, Andrew asked, do companies solve these challenges?
Marni explained that, at Gotransverse, we see our clients approaching this difference in a couple different ways. First, we have clients who will use a combination of both simple subscription and usage-based models, using the subscription as a baseline that includes the most common or central features and then offering additional services or features on a consumption-based model. “Then,” said Marni, “you’ll be able to get additional revenue as people are using these new and additional offerings.”
But Gotransverse customers who do use 100 percent usage-based billing aren’t flying blind, either, but they’re following usage trends that become apparent very quickly. “Typically, the users themselves will have trends and then your customer base will have trends as well, so you can use those to help predict the revenue you’ll see from these different products and services,” said Marni.
Data Analytics and Usage-Based Billing Go Hand-in-Hand
Continuing along the forecasting path, Andrew asked Marni to speak more on the importance of data analytics in a dynamic model like usage-based billing. Marni said that, while seeing exactly how customers are using products and services provides a powerful advantage for forecasting, research and development, and more, that shouldn’t be the sole focus. “One of the things we focus on is not just the usage data, it’s how you combine that with mediated data and the rating data, and it really gives you some rich insights into how people are buying your products and services, not just how they’re using them.”
Marni reminded listeners to take two things into consideration when it comes to looking for a solution to support usage-based billing models: First, that these models produce much higher volumes of data than other pricing models, do, so it’s important to look for a provider that offers quick access and query capabilities. Second, that data doesn’t come in a vacuum, and companies that are able to combine their billing data sets with other data sets through offerings like Gotransverse’s Premier Data Access are able to drive much richer, unique business insights.
The Basics of Mediation: What It Is, and Why A Good Mediation Engine Is a Critical Asset
Andrew asked Marni to explain a critical step in the quote-to-cash process: Mediation. What it is, exactly, and why it’s so important for sophisticated billing. You can read a more in-depth overview of mediation on our blog, but Marni offered a fantastic, high-level overview. “Usage data comes in a side variety of formats,” she said, “and what mediation does is make sure they get digested quickly and properly to be rated by the rating engine.”
But, of course, not all mediation engines are created equal. “Good mediation solutions will have business rules that can be added on top,” she said. “So if you need to aggregate events or if you have missing data and need to do data enrichment with a lookup table, you can do that to ensure that you have good data coming into your system.”
Without a mediation engine, Marni warned, companies would have to standardize data from their hosting services, mail servers, web services, and more through programming or external mediation solutions, which are more costly, more time consuming, and less effective than an automated, built-in solution.
What Large, Multinational Corporations Need to Look for in Billing Solutions
As complex billing becomes even more complex for multinational organizations with a variety of business models in play across the globe, Andrew asked Marni to talk about what these companies need to keep in mind as they search for a billing partner.
Marni noted that the most important consideration is the fact that different regions will have different billing needs. Language and currency conversions are the most obvious, but she also reminded viewers to keep in mind that different regions will use different payment methods, gateways, and processes; that they’ll have different security requirements; and that even the invoice contents and layouts may change based on geography. Companies will want to look at each country or region as a separate entity, Marni suggested, and ensure they can accommodate each one’s unique needs.
In Seeking Usage-Based Billing Solutions, Plan for Growth and Change
Finally, Andrew asked Marni what every CFO or CIO needs to know as they’re starting to look at usage-based billing models. Marni’s biggest advice was that the right solution not only meets today’s needs, but it enables change and growth just as effectively. “Don’t just think about what your needs are right now, but think about what your customers and what the market will demand in the next two, three, or five years,” Marni said, “and plan for that.” The last thing a business needs is to invest in a new solution only to have to replace it in a few years.
Additionally, she said, it’s important to plan for unexpected change. “Look at the agility of the solution you’re putting in place. You need to look for a solution that will enable you to test out new pricing and new models and to bring new offerings to the market quickly.” 2020, she noted, was a perfect example of why the most agile businesses are often the most resilient, as well.
Don’t forget, you can register and watch Marni Burger’s full conversation with Andrew Dailey at this link. Then, when you’re ready to learn more about how Gotransverse partners with companies to help them fulfill their most complex monetization needs, we invite you to take a virtual tour of the Gotransverse platform or request a demo to speak directly with one of our experts.