What is Usage and Rating?
The foundation of the Gotransverse platform is its rating engine. As your customers begin using your products, whether digital products or physical products, there are usage ‘events’ that can be fed to the Gotransverse platform to power any number of actions, notifications, or financial transactions.
| Usage | Rating |
|---|---|
| Monthly Subscription | $50/mo |
| Data Overages | 2Gb @ 10/gb |
| International Calling | $5/call + $1/min |
When dealing with digital products, Gotransverse is easily integrated to your technology backend via the Gotransverse API, microservices, webhooks, or other 3rd party middleware applications. As your customers use your digital product, Gotransverse collects the data and feeds it into its powerful rating engine. If the product is not digital, but an actual tangible object, the data that powers the Gotransverse rating engine can be collected at the time of the sale, time-based as in daily, monthly, or yearly fees, or integrated from the point-of-purchase system, CRM, or entered manually via excel files, or the Gotransverse application.
Usage is how you measure how much of your product is being consumed by your customers. Rating is applying a cost to that consumption.
What can you do with Usage and Rating?
Gotransverse has the capability to collect and rate millions and millions of usage events in near real time. You can imagine how the total amount of data needed to be rated can easily out pace manual processing, or less sophisticated systems. Say you want to explore what the financial impact would be if you changed your pricing structure.
Gotransverse can process a virtually limitless amount of data, say from the last year, and re-rate it with a new pricing structure without breaking a sweat, and without interrupting the normal operations of your business.
Rating vs. Billing
Rating is applying the monetary cost to usage events. Billing is taking that cost and creating an invoice that is sent to the customer, a charge to a credit card, bank account, or a deduction from a prepaid balance.
There are many ways to rate a usage event, and Gotransverse handles them all.
1. Allowances
Allowances can be thought of as simple subscriptions. The allowance model works similarly to a classic retainer you might pay an attorney or other service provider. The customer pays a subscription fee that covers up to a predetermined consumption amount (an allowance), and that fee is the same whether the customer uses the full allowance or not. These allowances can be prorated to account for customers who sign up in the middle of a billing period, and they can also include overage charges — per-event charges for every consumption event beyond the allowance — as well as rollover, which adds one month’s unconsumed balance to the next month’s allowance, just like old-school cell phone minutes.
2. Tiers
Tiered models include stair-stepped pricing based on amount of consumption. You might think of these as similar to bulk discounts. At the lowest tiers — the smallest number of units — you pay more per unit. But the more units you buy, the less you pay for them. For example, you might use 20 units for $10 apiece, but if you use 40 units, the price drops to $7 apiece.
3. Tapers
Tapers are similar to tiers in that the price decreases as the quantity increases. However, while tiered pricing applies to every unit purchased, tapered pricing only applies to the quantities within each category, just like the federal tax brackets. So taking the same quantities from the example before, the model looks a little different. You still use your first 20 units for $10 apiece, but if you use 40 units, you pay $10 apiece for the first 20 and then only $7 apiece for units 21 through 40.
4. Multidimensional
Multidimensional models calculate price based on complex formulas that take multiple conditions or attributes into account. For example, look at your most recent Lyft or Uber receipt. You’ll see charges for time as well as miles, surcharges based on demand, and even a flat fee or two. (You can see how these calculations could start to get confusing without an automated rating system!)
5. Sharing
Sharing models come in two different forms: Usage allocation pools reallocate charges to each user based on the share of the pool they consumed. Resource sharing looks more like a family plan, meaning every user draws from the allowance, and no matter what the balance looks like between users, nobody is charged overages unless the total consumption exceeds the cap.
6. Time-Based
For services with fluctuating rates (like hotel rooms or plane tickets, which change based on season, demand and, it would seem, whim) a rating engine can ensure each event is charged the rate that corresponds with the time the service was consumed or purchased.
7. Pass-Through
Pass-through rating allows businesses to take in a pre-rated event and apply it to customers’ allowances without changing the charge of the event. So if a portion of your pricing comes into your billing system already rated, you don’t need to waste time sending it through the rating engine again. Or if you want to add an up-charge to a pre-rated event, you can easily do that too.