The Evolution of Variable Pricing Models & Revenue Management with Apurv Bansal - Founder and CEO Zenskar

Nov 20, 2024

Apurv Bansal, Founder and CEO of Zenskar, a cutting-edge billing platform, discusses the shift towards variable pricing models like Usage-Based and Value-Based Pricing. He highlights the complexities these models introduce to billing, emphasizing the need for real-time integration of usage data to ensure transparency and customer trust. Apurv also shares insights on revenue management, the importance of customer experience, and challenges for early-stage SaaS companies. Additionally, he provides valuable advice for aspiring B2B tech founders, stressing passion and patience in entrepreneurship.

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INSIGHT

Usage-Based Billing Complexity

Usage-based billing requires information from both the contract and usage data.
This differs from subscription billing, where the contract contains all necessary information.

INSIGHT

Usage Reports and Trust

Usage-based billing requires detailed usage reports similar to phone bills.
Customers need to understand the charges and avoid trust issues.

INSIGHT

Billing and Customer Trust

Billing is crucial for customer experience and trust.
Inaccurate billing erodes trust and can cause churn.

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As SaaS pricing evolves to be more variable in nature, such as in Usage-Based Pricing or Value-Based Pricing the requirements for a more flexible billing platform that also enhances the customer experience and also becomes a foundational component of financial reporting.

Apurv Bansal, founder at Zenskar is converting that evolving need into a next generation billing platform. During this conversation with Apurv, our host Ray Rike covers the following topics with Apurv:

The evolving nature of Usage-Based pricing and its Impact on Billing Software Requirements
The role of customer experience in billing -
Revenue Management - beyond manual processes and platforms
Revenue Operations - The impact of Billing Platforms

Recent benchmarking research indicates that over 50% of B2B SaaS companies are leveraging some level of variable pricing, such as Usage-Based Pricing and Value-Based Pricing. If a company's billing is not based upon a flat-rate subscription model, such as a "seat-based" model, the vendor knows the # users BEFORE the next months or years invoice is being calculated - because it is based upon the contact.

In a Usage-Based Pricing model - the number of units required to create the bill/invoice needs to come from both the agreement and the "store of usage". This adds a significant level of nuance and complexity to the next generation of SaaS billing.

When monthly invoicing is highly variable and dependent the latest usage - not only is calculating the monthly charges become more complex - the customer now needs a more detailed "customer usage report", which may also may need to be provided by user, by system or by whatever triggers a usage based trigger leading to a charge.

If you are currently using or considering introducing a highly variable pricing model, and are considering both the infrastructure and the customer experience resulting from monthly invoices which vary materially based upon usage - this conversation is a highly informative and educational on the evolution of pricing models and the resultant billing technology required.

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