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Blog/ Mar 19, 2024

Embracing the Shift: How the Usage Economy is Transforming Consumer Experiences

The billing transformation is here. Consumers now crave convenience, flexibility, and personalized experiences. Is your modern business billing giving them what they want, or are you still relying on fixed fees, foggy plans, and unnecessary add-ons?

It’s time to make the switch to the usage economy—before your competitors do.

If you’re unsure where to start, I’ve got you covered. In this article, you’ll discover the basics of understanding usage-based billing, why consumers prefer it, and why your business needs to embrace these evolving billing models to stay competitive in the marketplace.

What is usage-based billing?

People are sick of paying too much for one-size-fits-all products and services. Consumers want to pay for what they use. Nothing more, nothing less.

Usage-based transactions charge based on resources your customers have consumed rather than overcharging for resources they have underutilized.

Picture this: You need a ride, but owning a car is an expensive hassle. Download Uber or Lyft, and you can snag a ride with a tap of your phone and pay only for the trips you take. Netflix has flipped the script on how we binge-watch our favorite shows. No more cluttered shelves of DVDs or pricey cable bills, just endless streaming for one monthly fee. Even your cell phone plan has ditched contracts and sky-high fees for unused data.

Why do consumers love it?

Flexibility, transparency, and choice are total game-changers in today’s economy. The dollar doesn’t go as far anymore, and people are putting a lot more scrutiny on the specific value that they’re getting for their money.

Customers have a clear understanding of what they’re paying for with usage-based transactions. There aren’t any surprises. They aren’t left guessing how much they’re using or what they’re paying for.

Usage billing provides a clear understanding of their usage habits and allows them to adjust their consumption to optimize their spending. Whether it’s choosing the exact features of a software subscription or adjusting data on a phone plan, consumers can maximize value without being locked into rigid commitments.

Smart billing trends show that consumers will pay for value, but they don’t want wastage. That’s why people are cutting the cord on their cable TV subscriptions or holding off on buying cars.

Subscription solutions ended the era of ownership. The era of customer-centric billing is right around the corner. That’s why you need tactical business solutions for optimizing product value and giving your customers what they want.

What does it mean for your business?

Customers today are pickier than ever before. Why shouldn’t they be? They have more information at their disposal and more options to choose from. Reviews from other customers are only a few clicks away. Window shopping can be done on a phone or computer.

If customers clearly understand the value they’re getting for their dollar, they’ll stick around, stay loyal, and provide a greater lifetime value to your business. For companies offering a subscription service, their traditional plans typically aren’t a fit for every customer. Being able to have flexible, usage-based options is a great way to keep customers satisfied and engaged.

In fact, Logisense insights show that business value maximization wins big in the usage economy. Fifty-four percent of CFOs surveyed agreed that having a usage-based option could reduce customer churn. Similarly, a 2020 study by TechCrunch revealed that year-over-year revenue growth was up 38% for public SaaS companies that employed usage-based pricing models over those that didn’t.

Usage billing also offers deep insights into your customers’ wants, needs, and habits. Without understanding these usage patterns, your product pricing and service offerings all amount to guesswork.

 And guesswork isn’t a great way to run a company.

With the emerging usage economy, however, there’s much less guesswork. Atomic-level insights into customer patterns lead to superior product design and service. Analyzing usage data can help you reduce churn by engaging customers more efficiently and diminishing pain points or possible dissatisfaction. That gives you the chance to get in front of problems and provide a positive customer experience.

Embracing the usage economy isn’t just smart. It’s survival of the fittest.


The days of ambiguous billing are over. Are you ready to embrace the shift?


Flexible, transparent, usage-based billing empowers people to make their own choices—and flexible choices make customers four times more likely to enroll and twice as easy to retain.

It pays to move away from traditional, sales-focused approaches to more customer-centric, modern product strategies. Put the power in your customers’ hands and they’ll put their money in yours.

Need help taking your first steps and leading in the usage economy? Discover how to start billing for value and aligning your business with modern consumer expectations with our new book The Usage Economy.


Available now: at Amazon.


About the Author

Adam Howatson /

Adam Howatson joined LogiSense as President and Chief Executive Officer in January of 2019, where he also serves as a member of the Board and Board Secretary. Before joining LogiSense, Adam led the go to market and partner functions of Canada’s largest software company, OpenText, as Chief Marketing Officer and SVP.


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