Manage Billing for All Pricing Models in a Single Tool

Key takeaways:

• Recurring Charges enable m3ter customers to set up traditional subscriptions (e.g., user-based) and bill everything through the m3ter platform – no standalone subscription management tool required.
• A Recurring Charge is characterized by its regular billing frequency and the specific quantity being billed.
• When used on their own, Recurring Charges allow for the creation of traditional recurring subscriptions. When flexibly combined with m3ter’s existing capabilities, they allow you to design almost any hybrid model that has both fixed and variable elements.

SaaS pricing is increasingly a hybrid world

In the SaaS landscape of 2024, pricing models are distributed along a spectrum. At one end, some companies continue to use traditional subscriptions that were typical in the early phases of SaaS. At the other, companies have switched to pure usage-based pricing (UBP) or even outcome-based charging models. But many companies exist somewhere in the middle in a hybrid pricing realm.

That means they have a product portfolio that includes BOTH subscription and UBP products.

Or, it can mean they have pricing models that combine elements of both subscription and usage. According to OpenView Partners’ annual SaaS benchmarks survey (ending September 1st, 2023), 41% of SaaS companies had adopted UBP or hybrid pricing, with a further 17% actively testing it. Overall, more companies were found to be using usage-based subscriptions (hybrid) pricing models versus largely usage-based or pay-as-you-go (PAYG).

These hybrid models are often preferred to “pure” usage-based models because they are a “best of both worlds” approach. The subscription elements provide reassuring predictability about costs for the customer (and revenues for the vendor). The usage elements provide flexibility for heavy users to consume more of the service for additional fees that seem fair.

Overcoming complexities of hybrid pricing

Usage-based pricing brings with it additional operational complexity because you need the ability to ingest, transform, and rate product usage data. 

Most systems on the market are good at subscriptions, but have difficulty with usage. Our many conversations with SaaS companies over the years made it clear that this is a challenge. They wanted to take advantage of a hybrid approach – whether it’s a hybrid pricing model for one product, or different pricing models for different products – without having to use multiple billing platforms or subscription management tools. 

It became clear that our customers wanted m3ter not just to perform bill calculation for largely usage-based models, but to be the single platform that covered all bill calculation needs.

Introducing: Recurring Charges

With Recurring Charges, m3ter customers can set up traditional subscriptions (e.g., user-based) and bill everything through the m3ter platform – no standalone subscription management tool required.

A recurring charge is characterized by its regular billing frequency and the specific quantity being billed (e.g., the number of units, seats, users or any other business metric used).

Easily manage the frequency with which a charge is billed, as well as the quantities (known as a Counter in m3ter) that are billed each period. There are options to prorate mid-period quantity changes if desired, so that you have greater control over costs and revenue.

You can manage the number of units per month in the m3ter UI, or make use of our API, since you have access to a history of the changes in quantity used to calculate the recurring charge.

Streamlining billing tools for hybrid pricing

When Recurring Charges are used on their own, they allow for the creation of traditional recurring subscriptions such as user-based subscriptions, fixed or license-based services, or package/module subscriptions.  

In addition, Recurring Charges can be flexibly combined with our existing capabilities, allowing you to design almost any hybrid model that has both fixed and variable elements. For example, you can have a pricing model that has a traditional subscription element (e.g. a number of development licenses/seats) with usage-based pricing (e.g. API calls consumed across all those seats).

This Recurring Charges feature is only one of a range of tools in m3ter that allow customers to design pricing models that involve fees spread over time or repeating. Other features include (but are not limited to):

• Standing charges
• Minimum spends 
• Commitments (which can be billed on a regular or customized schedule)
• Balances

The overall impact is that you can bill for anything with the m3ter platform - it can be your only bill calculation tool, which helps you rationalize and simplify your stack.

Getting started with m3ter Recurring Charges

m3ter Recurring Charges makes it easy to set up a recurring subscription charge with a quantity of “units”, simplifying the process of billing for subscriptions and managing billing as resource needs change.

Schedule a demo and see how the powerful m3ter platform can manage your complex billing – from UBP to subscription and everything in between – all in one place.

Current m3ter customer? Read more about setting up Recurring Charges in our Docs →