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‘Billing 3.0’: an enabler of dynamic revenue streams


In this guest post, Transverse’s COO and Co-Founder, Chris Couch, argues that activity-based billing, ‘Billing 3.0’, is an enabler of dynamic revenue streams in multiple sectors that could present an opportunity for telcos.

Consumption is changing. As consumers, we are transitioning from one-off purchases of static goods and services to longer-term, multi-dimensional activities that morph and evolve according to our personal preferences, usage patterns, and vicissitudes of life.

At the same time, businesses exist to make profit. And profit can quickly erode without measures in place to control access. One example of this is the recent implementation of paywalls by many newspapers. News outlets like the Financial Times and New York Times now allow a set level of free content but then block access to non-subscribers past a specific article count. While this is staving off revenue loss, it may only be a short term solution. The New York Times may soon need to adopt greater personalization - say personalized options for coverage of a certain business or just the sports section.

This evolution of consumerism is galvanized by the devices, infrastructure, and mindset changes in an increasingly digital world. Unfortunately, customer preferences are changing faster than the billing system of most content providers or digital retailers are evolving. Homegrown billing systems - often based on Excel - can’t keep up with the constantly changing, web-centric customer world.

To address this, business must first shift to view billing as a critical strategic asset for not only capturing revenue, but also personalizing services.

Digital goods/content providers need to embrace and adopt billing models that give customers more value for the same dollar and the same effort. Give them choices, personalization, easy access, easy payment, easy management, and easy evolution as their interests and circumstances change.

Evolving Billing

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Modern day billing has deep roots into the solutions established by telecom - Billing 1.0. These highly robust and sophisticated systems were built over many years at a huge cost, making them accessible to only very large enterprises. While Billing 1.0 was valuable in establishing predictable and continual contact with customers, usually with a monthly bill, it did little to push the relationship forward and drive monetization.

Billing 2.0 came with the emergence of cloud based services and models. Billing 2.0 shifted billing resources to the cloud, making solutions easier to deploy and highly cost effective for the majority of businesses. These solutions were perfect for simple recurring payments and subscription management. However, Billing 2.0 lacks the sophistication to handle complex billing situations and cannot accommodate activities.

Enter Billing 3.0, which blends the best of the previous models: able to solve complex challenges, yet cloud based for affordability and continual improvement. For service providers, Billing 3.0 allows for creating combinations of services, pricing, and payment options around the dynamics of customers so that every customer interaction and activity becomes an opportunity for monetization.

Shifting Toward Activity-Based Billing

Billing 3.0 enables companies of all sizes and business models to better serve customers and increase revenues. Regardless of where a company is in its billing evolution, there is opportunity to leverage what’s in place to establish relationships with customers, and to build out multiple customer relationship cultivation points that present opportunities for up-sell or cross-sell of services relevant to customers’ circumstances, preferences and usage habits.

In essence, if you know your customer, and more importantly, know how your customer is using your services, you can leverage that knowledge to trigger new activities on an ongoing basis, and monetize those activities - all along improving customer satisfaction and loyalty. This is activity-based billing.

To achieve the benefits of activity-based billing, enabling you to dynamically configure and reconfigure services and pricing around customer activities, businesses must be able to transform not only pieces of subscriptions and other valuable levers, including: sign-up/activity/event fees + bundles + add-ons + incentives + promotional products.

Armed with information on how your customers are using and interacting with your service, you can understand your customers, increase revenue, identify customer trends, and deepen customer loyalty. Don’t let an outdated billing backoffice prevent you from realizing success.

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