Rethinking billing with extensibility
By now, most SaaS companies have realized that the subscription pricing model leaves value on the table. With pricing models becoming more sophisticated and flexible, the one-size-fits-all approach provided by most billing tools is too limiting. Yet building a proprietary billing system from scratch isn’t the right answer for everyone.
What if we reimagined the challenges of billing and its impact on pricing by considering extensibility? In an extensible billing system, businesses can customize functionality to their specific needs at any moment—making nuanced pricing a dynamic part of operations. Extensibility allows businesses to adapt and evolve their software to meet their customers and their needs wherever they are.
Why billing extensibility matters from day one
“Once we're past the next stage of growth, we'll raise our prices.”
It’s a familiar refrain and easy fallback for time and resource-constrained companies. Which is why one of the most pivotal decisions companies can make to supercharge their growth trajectory is implementing an extensible billing system early on.
The reality is pricing and business models in SaaS are changing more rapidly than ever before, with pricing changes happening multiple times per year. Yet without an extensible billing system in place, companies are struggling to run even one price change a year.
By establishing a mindset of continual pricing evolution from day one, you can avoid continually retrofitting your billing system—and set up your business for sustainable success. With extensibility, wherever your business goes, you have a platform that grows with you.
How to evaluate billing extensibility
Before even thinking about how to evaluate extensibility, determine who is doing the evaluating. Involving your product and engineering teams from the beginning ensures their requirements are addressed in a shifting monetization landscape. Beyond invoicing and reporting capabilities, factors like data scalability, sophisticated pricing levers, and price change automation are becoming increasingly critical.
Once you’re in the assessment stage with the right stakeholders, take a balanced approach that considers both current and future needs. While you can test a scenario that works at this moment under today’s requirements, how can you anticipate what tomorrow looks like? Or the next quarter?
The most effective way to evaluate extensibility is to treat it like edge case testing. This means investigating:
- Complex customer contracts. The more difficult and nuanced the better.
- Weird exceptions. In what creative ways, like volume discounts, have you closed deals with a customer?
- Messy data cases. Where did you have to correct data quality because of an inadvertent bug in usage tracking?
- Product roadmap. Talk to your product team to find out where the product may be headed—and understand the future requirements on pricing and packaging.
Ultimately, a fully flexible system is the foundation for successful business outcomes. By testing for extensibility at the evaluation phase, you can select a platform that will bring your organization’s ambitions to life.
How does billing extensibility come into play at Orb?
We built Orb from the ground up recognizing the incredible variety and richness in software pricing. The details that make your product unique—and shape how your customers perceive value—can define your monetization strategy.
You can think of our platform as a pyramid with three integral layers.
- Data infrastructure. You need a scalable, accurate usage tracking capability. Clean data is a prerequisite for everything that comes later.
- Billing engine. Table-stakes capabilities to invoice your customers with accuracy. Every company that has a recurring business billing model needs to think about wide-ranging factors including: time zone adjustments, proration, upgrades and downgrades, discounting, and currency exchange.
- Your pricing logic. This is where your own business model comes in, and where the things that make your company unique show up—like the logic for how a SaaS company defines an active user to charge for MAUs, or the units for which an AI product defines a token-based consumption model.
Because we handle the table-stakes data infrastructure and billing capabilities, you can jump ahead to customizing our extensible pricing platform. With this approach, any company has the power to ‘program’ their own business logic onto the platform.
What does that look like? Whether you’re accessing the most common pricing models out of the box or diving into the right advanced modes, there’s rich flexibility to make the right decisions. For simpler use cases, our intuitive drag-and-drop editor means anyone on the product or revenue team can design the solution that works for their needs at that moment. If your use case is more advanced, switch to the custom SQL platform and customize Orb even further.
No matter where your business started, the solution with extensibility will be the one to take you to the next level. This goes beyond just "figuring out billing;" it’s about partnering with a platform for growth, whether that’s your next product launch or pricing change.
If an extensible pricing platform sounds like it could help your business, let’s chat.