Your New Billing Model: Can You Tell What It Is Yet?
Growing up in the UK, one of the TV shows I remember watching featured Australian artist and musician Rolf Harris. As each show drew to a close, Rolf would quickly set to work filling a large empty board with seemingly random brush strokes of different colors. About mid-way through his painting, Rolf would turn to the studio and TV audience and ask with an impish grin, “Can you tell what it is yet?” As he continued painting, the strokes would finally resolve themselves into a recognizable image like a portrait or a landscape.
When it comes to revisiting billing software and established practices, many firms are reaching that middle phase. While they have the sense of something starting to take shape, they don’t yet have any clear sense of what the ultimate endpoint will be. Is that your experience with your organization and the industry it serves?
Firms are simultaneously trying to anticipate which types of billing will resonate with prospective and existing customers, while also responding to what their peers are offering. Frequently, one or more competitors in a given industry have emerged with a fresh approach to packaging and charging for products and/or services, which often involves some type of subscription billing. However, what tends to remain unclear is whether the billing type in the ascendant is the ultimate market destination or just a midpoint on the way to a completely different billing model.
Whenever a market reaches what I’ll call that “Can you tell what it is yet?” midpoint, experimentation becomes the better part of valor. And that’s what more and more firms are doing – cautiously trying out a different approach to billing in a reasonably painless and cost-effective way. They may look to achieve this with the tools they already own – whether homegrown or third-party; they may turn to mid-market SaaS billing software; or they may adopt more entry-level billing functionality. With their experimental approach, they tend to apply the new billing approach to:
- A single market or a specific region for one or more products
- One brand-new product or service across all geographies
- A net new bundling of existing products or services in one or all regions
- A combined offering in a new partnership with a third-party or an expansion of an existing relationship
- A new customer base or a defined subset of their existing customer base
As these firms experiment and then amass and analyze data from the new approach, it’s more likely that they can begin to fill in the rest of the billing picture and gain more of a sense of where they’re heading. Are you adopting one of these experimental approaches, and, if so, how is it working out for you?