SEVEN DIMENSIONS OF MONETIZATION
Rating, Mediation and Billing
Once the sale has been made, companies need to have a robust billing and revenue management cycle in order to deliver accurate and timely billing for the products and services consumed by customers. This dimension focuses on streamlining the billing process in order to ensure accurate billing, facilitate revenue management and maintain or increase customer satisfaction.
What is Your Company's Maturity Level?
Ad-hoc
Manually generated bills and invoices. Can only handle simple, flat monthly subscription charges. Manual tax application. Scale through headcount.
Structured
Spreadsheets used to manage simple subscription models with minor changes and limited usage rating. Monthly invoice/bill runs. Tax calculations from linked spreadsheets.
Coordinated
Standalone or home-grown system to manage usage-based models, mediation, proration, free trials, etc. Monthly invoices sent automatically to customers. ERP and tax engine integration.
Optimized
Dedicated system to handle up to the most complex usage-based models. Full entitlement management. Automated bills are prompt and accurate, with tax rules applied automatically.
Rating, mediation and billing includes the following steps:
Charging models define how pricing is structured based on different factors, such as usage tiers, volume discounts or metered usage. Having well-defined charging models enables accurate and consistent billing, aligning revenue with the value delivered to customers.
Usage rating is important for businesses using a model that charges for usage or consumption. Think of data usage, minutes, storage capacity, etc. Accurately capturing usage information and rating it correctly–applying the correct charges based on defined pricing structures–ensures accurate bills based on actual data.
Discount and rebate application allows companies to apply changes in pricing on top of pre-defined rules, ensuring customers receive the appropriate discounts or incentives. This increases customer attraction and builds loyalty, while improving the accuracy of billing.
Mediation involves collecting, aggregating, standardizing and processing usage or event data from various sources. Mediation is critical in consolidating data and transforming it into usable billing information.
Taxation rule application is an important part of billing calculation that ensures compliance with tax rules and regulations. It provides customers with the most accurate billing and helps the company avoid potential penalties.
Subscription management involves managing proration, renewals and uplifts to ensure smooth management of subscription-related billing and revenue continuity.
Entitlement management is the process of providing customers access to the products, services or features they are entitled to based on their subscription or purchase. It helps maintain customer satisfaction and avoid unauthorized access to the product.
Billing presentment is crucial for maintaining transparency and trust with customers and facilitating prompt payment. By presenting the bill or invoice through a variety of channels, companies can ensure that invoices are delivered accurately and in a timely manner.
Key Takeaways
These may not necessarily reflect the order these processes happen in your organization, but collectively, they ensure accurate and transparent billing, facilitate better revenue management and improve customer satisfaction.