Usage-based billing allows you to bill your customers according to any metric related to customers’ consumption of either goods or services. If you can count it, you can bill for it.

This is a fantastic feature for pay-as-you-go subscriptions, as it allows further customization for the customer and helps you manage subscriptions which effectively follow your customer’s desires. Customers don’t always find their optimal solution among pre-set plans, and with usage-based billing they can tailor their purchases to best fit their needs.

Startup owners finding out how usage based billing will allow them to bill their customers according to any metric.

What kind of businesses should incorporate usage-based billing into their strategy?

Businesses which implement a subscription business model that grant their customers access to resources through their subscriptions (such as digital services or wireless providers) can benefit greatly from usage-based billing.

Usage-based billing offers a two-fold way to increase your business’ recurring revenue; a loss of revenue from high-consumption customers is prevented, and a new stream of revenue is available from customers purchasing more when they use more.

For any business offering scalable services, usage-based billing is a valuable subscription billing strategy, since customers have the option to purchase more of what they want or need. This billing system has the benefit of working alongside subscription plans so that you can offer usage-based billing as well as a subscription option to make payment flexibility greater. For a business that already implements a standard subscription management approach, the addition of usage-based billing can open up the option for customers to buy more on top of their current subscription plan on demand, without the worry of overpaying upfront.

Man is excited about Billforward because he found out that usage based billing will give his customers the option to only pay for what they use.

Why will your customers love usage-based billing?

The main reason that customers hesitate from signing up for subscriptions is because they feel they may be paying for things that they will not end up using. Not all customers will use a subscription package enough to make it worthwhile for them, hence usage-based billing provides much better value (and peace of mind). By offering usage-based billing, you can give your customers the option to only pay for what they actually use. It will help your customers feel more comfortable when they sign up, and reduce customer churn by giving customers less of a reason to cancel their subscriptions.

Usage-based billing allows more of your customers to have a positive customer experience, and it also enables those who don’t fit the standard subscription model to still get great value from your business’ offerings.

Businesswomen talking about how a usage based billing is a two-fold way to increase your revenue, as you are preventing a loss of revenue, while simultaneously adding another source of revenue.

How can Billforward help your business with usage-based billing?

Billforward’s flexible billing platform makes it easy for your business to incorporate usage-based billing into your pricing model. Implement a custom pricing scheme and seamlessly include additional charges in a customer’s upcoming bill so that they are charged exactly for what they use, without any pricing discrepancies.

Here are a few examples:

  • Bill your customers exactly for the number of days they have used your service in a billing period;
  • Charge your customers for the exact number of classes, workshops, or events they have attended in a month;
  • Bill for a standard coworking space access membership, and then charge for equipment rental on top of it;
  • Selling physical goods? Allow your customers to buy extras on top of their subscriptions as needed.

Man analyzes the benefits a usage based billing method will bring him and his customers if he implements it in his business.

Our billing flexibility means that we can accommodate usage-based billing in whatever form your business decides to use it. You could decide to offer metric billing on top of standard subscriptions, or as a pay-as-you-go subscription option independent of a standard subscription offering. Billforward’s billing software allows us to offer a customizable experience for both your company and its customers, no matter what you sell or how your customers want to pay.

Was this article helpful?