Metering is the way forward for usage-based pricing and billing

February 18, 2022

Amberflo co-founders Puneet Gupta and Lior Mechlovich connected with Gwen Shapira from the SaaS Slack Community to discuss all things metering and usage-based pricing. 

Some highlights and key points from the discussion include:

  • With the advent of cloud technology, pricing can always be broken down to “costs plus some markup.” Elastic back-end resources (via the cloud) allows you to always align front-end usage with back-end consumption. 
  • Usage-based pricing drives operational efficiency and is more fair to end-users. 
  • Metering system must be accurate. This means records must be guaranteed to be deduplicated and idempotent. The system must be durable and available according to enterprise cloud platform standards. 
  • You can afford to miss monitoring or logging data but not metering data as metering data is used for billing. 
  • Usage data is the lifeblood of a company - not just for pricing and billing, but to drive all areas of the business to drive operational efficiencies, such as product development, customer-facing functions, finance, and accounting. 
  • The metering service must handle ingestion, aggregation, persistence, and visualization - ideally in real time.
  • Metering service must be decoupled (yet integrated) from Pricing and Billing. Metering is the platform that pricing and billing applications leverage. 
  • You cannot back into Metering from Pricing and Billing. You should implement metering first and leverage that usage data to inform pricing plan creation and iteration. 
  • Meter everything - your pricing meters should be a subset of the customer-facing meters that track usage and action within your application or service. Likewise, you should meter the back-end as well to track the costs and resource consumption associated with customers’ usage. These cost meters should be a subset of your internal-facing meters. 

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