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Reviewing Pricing Options for Plans and Plan Templates

In the Pricing Editor, when you’ve added an Aggregation for a Plan or Plan Template, there are various options available to configure the exact pricing structure you want using that Aggregation. As preparation for performing this configuration work, this topic provides a review of the configuration options available for creating a Pricing for a Product Plan or Template:

• Pricing Options

A key part of pricing Plans and Plan Templates in m3ter is choosing the appropriate Pricing Type, one that will best fulfill the usage-based or unit-based pricing model you want to apply for charging your end-customers for consuming your product. The five Pricing Types options are designed to give you wide flexibility to set up your precise pricing use case, and these are explained in detail.

When you've set up pricing for Plans and Plan Templates and attached priced Plans to end-customer Accounts for billing, you might want to update a pricing on a Plan attached to an Account. It's important you are clear about the consequences of updating a pricing after the pricing has been used in production to determine charges on Account Bills:

• Editing Pricing

Pricing Options

In the Pricing Editor, a variety of configuration options for pricing Plans and Plan Templates are available:

• Start date. Enter the date from which you want the charges using this Pricing to apply for the Plan.

• End date. Enter a date on which you want the pricing to cease to apply to the Plan.

• Description. Enter a custom description for the Pricing, which will show against usage line items on Bills.

• Minimum spend. Enter a minimum spend for this Pricing. If the calculated usage charge using the Pricing falls below this value, then at billing an additional line item will be added to bring the charge up to the value you’ve entered. Default is 0.

  • Minimum spend billing. You can override the Organization-level setting for minimum spend billing in arrears/in advance.

  • Minimum spend description. You can enter a custom description for any minimum spend line items on Bills.

• Usage accumulates over the entire plan contract period. Enable a Pricing where the pricing tiers you set up are evaluated across the entire period the Plan is active for an Account, and not simply evaluated against each individual billing period. For example, suppose you have configured a Tiered pricing structure for charging per number of requests made to your service: $1 per request for the first 100 requests; $0.80 per requests for the next 200 requests; $0.60 per request for any above 200. Suppose an Account has this Plan attached with usage accumulation enabled and the billing is monthly:

  • If the Account holder makes 70 requests in the first month, the charge will be 70 at $1 = $70.

  • If a further 80 requests are made in the second month, the charge will be: 30 at $1 = $30 and 50 at $0.80 = $40 for a total of $70.

  • If the number of requests jumps to 220 in the third month, the charge will be 150 at $0.80 = $120 and 70 at $0.60 = $42 for a total of $162.

• Apply as. Select the way in which you want the Pricing to apply for a customer Account that you put on a Plan to which the Pricing is applied. Three options:

  • Debit. This is the default setting for the typical case where you want the amount calculated to be added to the bill as a debit, which the end customer pays for.

  • Product Credit. Select this if you want the amount calculated to be added to the bill as a credit (negative amount) which reduces the bill total. To prevent negative billing, the bill will be capped at the total of other line items for the same Product.

  • Global Credit. Select this if you want the amount calculated to be added to the bill as a credit (negative amount) which reduces the bill total. To prevent negative billing, the bill will be capped at the total of other line items for the entire bill, which might include other Products.

• Pricing Type. Allows you to select a type of pricing structure that is appropriate for how you want to charge using the selected Aggregation:

  • Pricing Bands. For each pricing type, you can define pricing bands to charge different rates for different levels of aggregated usage measures recorded for an Account that consumes the Product.

  • Unit Price or Fixed Price:

    • Unit Price. For Tiered and Volume pricing types, you can set up pricing bands for charging on a per unit basis.

    • Fixed Price. For the Stairstep pricing type, you can set up pricing bands for charging on a fixed price basis.

    • Combined Unit and Fixed Price. For Custom Tiered and Custom Volume pricing types, you can set up pricing bands for charging using a combination of per unit and fixed price.

  • There are five Pricing Type options:

    • Tiered. Select to configure tiered pricing bands for charging on a per unit basis depending on which pricing band they fall in. For example, you might set up a first tier charging $0.50 for the first 50 units used; a second tier charging $0.25 for the next 100 units used; a third tier charging $0.15 for any units used above 150 to an unlimited number.

    • Volume. Select to configure charge rates on a per unit basis according to the highest pricing band reached. For example, you might set up three pricing bands where the first band charges $0.50 for the first 50 units used; the second band charges $0.25 for the next 100 used; the third band charges $0.15 for any units used above 150 to an unlimited number. If a customer uses 120 units, they are charged at $0.25 per unit for all units used. If a customer uses 170 units, they are charged at $0.15 for all units used.

    • Stairstep. Select to configure pricing bands for fixed prices charged based on the highest band reached. For example, you might set up three pricing bands where the first band charges $2 for any usage between 1 and 50 units used - a customer who uses 1 unit is charged the same as a customer who uses 49 units; the second band charges $1.60 for anything between 50 to 100 units used; the third band charges $1.40 for 150 units used and above. The customer who uses 125 units will be charged $1.60; the customer who uses 210 units will be charged $1.40.

    • Custom Tiered. Select to configure a custom pricing structure which combines a fixed charge and a per-unit charge. For example, you might want to charge on a per-unit basis across several tiers up to a maximum and then charge an additional fixed overage charge for any usage that exceeds the maximum.

    • Custom Volume. Select to configure a custom pricing structure which combines a fixed charge and a per-unit charge. For example, you might want to set up three charging bands up to a maximum where customers are charged on the basis of the highest band they reach but any usage over the maximum incurs an additional fixed overage charge.

• Price per unit. Enter the price per unit charge rate for each pricing band configured for Tiered or Volume pricing types. Also available for Custom Tiered and Custom Volume pricing types.

• Fixed Price. Enter a fixed price charge rate for pricing bands configured on the following pricing types:

  • Stairstep

  • Custom Tiered

  • Custom Volume

• Prepayment / Balance Overage Pricing. If an Account has a Prepayment or Balance amount added to it, you can set up overage pricing bands to charge for any usage on the Account after the Prepayment/Balance amount has been consumed. If you do not set up overage pricing, then any usage after the Prepayment/Balance has been consumed will be charged at the regular rate. Note this is only available if:

  • You're using a Tiered pricing structure to price a Plan.

  • You have not selected for Usage accumulates over the entire contract period.

Editing Pricing

If you have set up a pricing using an Aggregation and you then edit the pricing structure, you can choose to either:

• Apply these changes from. Enter a date from which the new Pricing will come into effect. The original pricing structure will be applied for billing up to that date.

• Apply your editing changes to existing pricing. This means that the pricing structure will be updated immediately and will be applied to any re-calculated bills that were first calculated using the original pricing structure.

Next: Pricing Plans and Plan Templates

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