Let’s take a classic : the subscription contains a number of users with an extra fee per additionnal user. The customer is adding an extra user during the period.

How much is being charged?

Solution 1 : Wait until the next period

Don’t do that! This solution has 2 flaws:

For starter, it let your customers cheat with their monthly bill. For example they can add users at the beginning of the period and remove them before being billed (yes, people will try it).

Then you will lose huge money on annual subscriptions. Or have to deal with exceptions, making your offer less readable and create headaches for your sales team.

You think it’s a way to make your life easier at the beginning ? But when you will change it, your customers will blame you for the change and will talk (unhappily) about it on the social media. This is a good idea only at first sight.

Solution 2 : Charge for the whole period

The customer is charged as if the extra user has been added at the beginning of the period. In other terms: extra fee is due for the whole period.

This is the favored method for the SaaS editors because they feel like they earn more money. But there is a bias : passed the middle of the period, most of the customers will stop adding extra users and wait for the next period. Worst : if usage of a service is expensive and critical, we have seen customers set an internal policy to add users only at a given day of the month to reduce the costs. It does not really fit with the ‘real-time’ way of consuming we expect from SaaS products, isn’t it ?

And this issue is emphasied for annual subscriptions.

This solution makes sense for some services, but we do not recommand it for a pay-per-use or seat-based strategy. To be efficient, this kind of strategy requires to remove the frictions and incentive your customers to increase their usage. If they know they always pay the optimal price, they won’t have to think before consuming, hence they will consume more. This is what solution 3 is all about.

ProAbono let you configure easily the whole period charging solution and even limit it to a few offers or subscriptions.

Solution 3 : Charge a prorata

The customer is charged a prorata temporis of the extra fee for the remaining duration of the current period, and will pay the full price after the next period.

This is the default mode in ProAbono, and the one we recommand for most cases. This is is the favored method for the customers because they pay only for their usage. It fit with what they expect in this ‘pay-as-you-go’ era. For the SaaS editor this is a way of increasing the trust of the customer and reduce the friction for upsell.

Note that this is the recommanded approach, not the universal solution. In the case of paying options (On/Off), the benefit for the customer has to be continuous, not one-time.

The good example : allow your customer enable/disable the synchronisation between your service and a third party.

The bad example : allow your customer to access a download feature. He might enable the feature, make its donwloads and disable it afterward, being charged peanuts. Yes, obviousely you have ways to prevent a customer to disable an option, but this is another story.

This solution is the more complex in terms of calculation, but ProAbono automatically deals with it.