The 4 Things Every CFO & CIO Need to Know About Usage-Based Billing

At this year’s MGI Monetize Forum, Gotransverse Vice President of Marketing Marni Burger spoke with MGI’s Managing Director Andrew Dailey about the power of sophisticated monetization strategies for growing businesses. The interview covered a lot of valuable ground for CFOs and CIOs considering usage-based billing for their organizations, but toward the end of the conversation, Marni laid out four things every leader needs to keep in mind as they search for the right usage-based billing partner. We’ll break them down here.

Plan for the Future

When you’re evaluating potential billing solutions, remember that simply optimizing existing processes isn’t enough. “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 goal is to ensure the solution you’re looking at will enable rather than hinder your growth.

Are you planning to increase your customer volume? Move into a new geographical market? Adopt more complex billing models? Expand your offerings? If so, a billing solution that simply mees your present-day needs won’t be enough. You’re likely to outgrow it in a year, at which point you’ll find yourself either limping along with an ineffective platform, or you’ll have to start the search and implementation process over from scratch. So instead, search for a solution that meets your needs now and that will grow and evolve with your organization.

Look for Agility

As you plan for the future, it’s not just the intended roadmap you have to consider — it’s also all the unexpected changes that will hit the market and demand quick pivots. If there’s one thing 2020 taught us, it’s that the most resilient businesses are often the ones that are most agile. When “business as usual” is no longer possible, the ones that survive (or even thrive) are the ones that are prepared to turn on a dime.

So, Marni recommended, consider the agility of each platform you’re evaluating. Will it enable you to experiment with new pricing, new models, and different bundles as customer needs and desires shift? Will it allow you to bring new offerings to market quickly in the face of disruption?

Many billing platforms — even those that purport to handle complex, usage-based billing models effectively — require significant time, effort, and expertise to implement even the smallest changes. In fact, MGI research found that only 29 percent of companies can implement new services and pricing plans in less than four weeks. A truly agile platform, on the other hand, is easily adaptable and can handle both scale (up or down) and drastic change without batting an eye.

Not all Vendors Are the Same

As you’re vetting vendors, you’re likely to come across a lot of companies who say they can handle complex monetization needs, including usage-based models, when all they can really manage are the basics. “If you need more than just the basics,” Marni said, “make sure you’re investigating lots of different options.”

A few things to look for in a platform include powerful mediation engines, advanced revenue recognition, and hands-on support and consultation throughout the implementation process and beyond. Also, be sure to get specific information on what kinds of usage-based models a particular vendor can manage, because there are a lot out there! If a potential vendor says they’re savvy with usage-based billing, but they can’t give you details on how that includes any of the above, that’s a red flag.

Your Invoices Are Your Brand

Marni’s last piece of advice was a very pragmatic one that the Gotransverse team had asked her to share: Make sure the usage-based invoices you can produce with your chosen platform are clear and transparent. “When you’re talking about usage- and consumption-based business models, sometimes the pricing can be a little more difficult to explain,” she said, so it’s important to be extra clear to ensure customers are confident and comfortable with what they’re paying for.

After all, while receiving and paying an invoice may seem like a purely transactional experience, it’s actually a very important part of the quote-to-cash process. As the last impression a brand leaves with a customer, the invoice experience has the power to turn a one-time buyer loyal evangelist (or vice-versa).

Keeping these four things in mind as you start down the usage-based billing path will help you find a billing vendor that can help you achieve your most complex monetization needs — both now and in the future. To learn more about whether Gotransverse could be the right partner for your organization. We invite you to tour our platform today. If you like what you see, request a demo to speak with one of our experts.