IoT Billing on First Use

In the realm of IoT connectivity services, customer expectations for personalized service deployment are growing. With increasing competition, customers now demand more than just writing a cheque; they expect to pay based on usage outcomes.

Here, we outline creative strategies to personalize your usage-based models while safeguarding your bottom line.

Personalizing your usage-based models

Align Subscription Pricing to Usage

Most are familiar with the concept of usage-based pricing, where customers pay according to their usage — be it data bytes, minutes, or other metrics. However, subscription charges add another layer of complexity.

When customers provision their services, it might take months before these services are actively used. They might plan to use it for work, share it with others, or provision thousands of services ramping up over time. Should they be paying subscriptions for unused services?

Billing on the first use offers a solution — charge subscriptions only when the customer starts using the service. This approach can include a time window for when the usage should occur.

Protect Your Bottom Line with Grace Periods

Avoid scenarios where services remain unused indefinitely. Unused services without subscription charges can negatively impact service providers’ finances. If reselling services from a wholesaler, the provider might still incur costs even if the end customer isn’t charged.

Establishing a grace period mitigates this risk. Once the grace period ends, subscription billing starts, ensuring customers don’t overcommit to unused services while protecting your revenue.

Bill on First Usage and Bill When Used

Another related strategy is to bill when used. Customers might provision thousands of SIMs, with only a fraction being used in a given period. This could be due to reassignment, connectivity loss, hardware failure, etc. Service providers face customer frustration if billed for unused products.

Service providers should consider charging subscriptions only for used SIMs. This number can vary, so enforcing minimum commitments ensures a baseline subscription revenue.

How We Can Help

LogiSense, with over 25 years of experience in IoT and Communications, excels in managing Billing on First Use scenarios.

Our billing platform supports configurable bill-on-first-use thresholds, allowing customers to set detailed criteria for triggering subscription and usage charges. Grace periods limit how long a customer can go without incurring charges, protecting providers’ bottom lines. Contracts can include ramp-up schedules and minimum commitments to secure revenue.

By adopting these strategies, IoT service providers can offer personalized, usage-based models that meet customer expectations while maintaining financial stability.

Contact us now for more information on how you can enhance revenue accuracy, customer satisfaction, and market competitiveness.