The concept of pay-as-you-go or pay-per-use pricing is the simplest and most traditional usage-based pricing model. The customer has full access to the solution or service and simply pays for what was consumed over the duration of the billing period. It is simple to understand, fair to customers, and inspires more rapid adoption by eliminating the lengthy contracting phase and the hurdle of securing a major spend before accessing the solution characteristic to traditional subscription-based and license-based technology pricing models.
Increasingly, we see companies looking to implement usage-based pricing in part or whole across their platform using the pay-as-you-go model as a way of differentiating from competitors and enabling greater business agility and control over product revenue streams. As self-service delivery and Product-Led Growth sales motions gain further adoption, pay-as-you-go pricing will be implemented as a key vector to reduce friction at adoption and drive growth. The transparent nature of the approach inspires customer trust and is simple for finance and budgeting teams to reconcile (when properly implemented, that is).
Customers can access the services or functionality they need to immediately solve problems and realize value; meanwhile, this usage is tracked, associated with the customer, and aggregated by underlying metering infrastructure. Aggregation rules are defined according to what each meter is intended to track, this can be a straightforward sum each time an event happens, but can also expand to include more complex use cases like handling unique counts or tracking event duration. As customers freely use the solution or service, usage is tracked and aggregated according to the Product Item Rates (how much each item costs). This usage can be viewed in real time in the Amberflo Usage and Revenue Explorers, and can be exposed to customers as well via the Amberflo Customer Usage and Billing Portal.
At the end of the billing period, a metered invoice is generated according to the aggregated usage accrued during the billing period. The invoice shows the Product Items consumed and their respective quantities and rates. All of the data is guaranteed in the metering system to be accurate based on the fundamental design principles of a metering system, so customers can audit all billing data. Every billed event can be reconciled with a unique meter.