For the majority of companies looking to grow their business, customer acquisition is the primary method of focus. Large percentages of marketing budgets are targeted to activities to increase leads and improve overall brand awareness.
Your target audience will generally want to understand the following items about your company and product/service.
- Is your brand seen as trustworthy and align with their values
- Do your products/services fit a need?
- Can your customers trial or test drive your products/services?
- Do you offer pricing models that fit the way the customer wants to pay?
The rest of this discussion will focus on the last two items in the above list. It will talk through some of the common billing-related features that customers may be looking for or find attractive during that initial acquisition phase.
Trials, Promos, and Test Drives:
When it comes to acquiring new customers many companies offer trials or promotions that give limited access to use their products or services. These can be feature-limited “Free” versions, time-limited trials, or promotional discounts to get started. These types of offers require billing platforms to handle the monetization rules and your product or services to enforce the entitlement rules. You always remember a great experience, just like taking a test drive in a car. Focus on the customer experience and make sure they get to experience your product or service the way they want to and you will have a much easier time converting them to a paying customer.
When it comes to pricing your product or service there are many factors depending on your focus markets, competition, or product/service maturity. Knowing your customer’s expectations is key, and setting pricing structures based on what they want.
This is where you want your Billing Platform to have flexibility and coverage for what you uncover from market research, market/consumer testing, or competitive intelligence.
Items you should consider regardless of how you currently sell your product and services:
- Can you provide a small set of options or is every deal personalized?
- How large is your product/Service catalog?
- What ways can you price your products/service by
- One-Time transaction / Upfront payment
- Recurring (Monthly, Quarterly, Annual) - Subscriptions
- Pay for what you use/Outcome-based - Usage Based Billing
- Hybrid Models with inclusions (Subscription with Usage)
- Add-on and Bundling option (Rules for product selection or discounts)
- Discounting, Ramp schedules, Volume/Tiered pricing
- Contract Terms or Minimum Commitments
- Life Cycle Pricing (Activation, Suspension, Upgrade/Downgrade, etc)
The key for the above three areas is that your customer base and markets will drive how they want to buy your products and services and you need to be able to adapt. Having a Billing Platform that can’t support what you want to offer typically will delay your time to market or prevent you from acquiring customers before your competitors do.
If you are in the marketing or product teams you need to at least understand what your current Billing Platform can support. The knowledge you gain from knowing what your limits are can help you focus on testing our offerings that can be supported and implemented now. Many of the companies I have talked with over the years have great ideas for pricing their products and services, they can gain early consumer adoption but turn back to their Billing Platform or IT/Finance teams only to find out that the use case will take a year or more to implement. By that time a new competitor has entered and captured what you were able to and you begin to lose traction.
I hope you can take advantage of these thoughts in the future and grow your customer base. I would love to hear from you on what works or what options you think are missing.