Solving Billing Challenges from Start to Finish

Introduction

“If you ask a child what they want to be when they grow up, no one says ‘billing.’ No one says ‘I wanna do pricing,’ but a lot of people have opinions… and want to be involved.”  

Arnon Shimoni

The conversation covered quite a few topics including Storytel’s approach to customer acquisition, payment methods, discounts, cross-team collaboration, building a billing system, the differences in billing and monetization between B2B and B2C, the various touchpoints of monetization, and the different approaches to solving billing challenges, just to mention a few. But in this blog post, we’re gonna focus just on the last two mentioned.

The Touchpoints of Billing and Monetization

Monetization has quite a bit of touchpoints in business operations, each playing a unique role in boosting revenue and keeping customers happy. So no, monetization isn’t confined within the finance or billing or revenue operations sphere. Whether it’s attracting new customers with some innovative pricing strategy that you came up with or making sure that everything you do is compliant and staying on the good side of the auditors and legal folks, each touchpoint adds a splash of personalized flair to the monetization journey. Recognizing that monetization has an impact on a wider scope of business operations, businesses can explore new revenue streams, fine-tune pricing strategies, and create a lasting and lucrative relationship with their users.   

Below are but a few touchpoints mentioned in the podcast. The touchpoints would, of course, vary depending on factors such as an organization’s business model, target market, industry, and positioning.

Analytics and Optimization

By analyzing customer behavior, market trends, and sales data, you can find new opportunities to increase revenue, fine-tune your pricing, and tweak your strategies for maximum monetization success.

Communications

Effective communication with customers is crucial for monetization. Clear and persuasive messaging about the product or service’s benefits, features, and value proposition can drive customer interest, engagement, and ultimately lead to conversions.  

CRM (Customer Relationship Management)

Building relationships with your customers is key to keeping that revenue flowing. CRM systems and practices help you manage those interactions, find sales opportunities, and cater to each customer’s needs to keep them coming back for more. 

DevOps

DevOps can drive monetization through faster time to market, increased efficiency, cost reduction, and improved quality. 

Marketing

Marketing efforts, such as advertising, branding, and promotional campaigns, directly impact monetization. It’s all about spreading the word and getting people excited about what you’re offering. A killer marketing strategy can bring in new customers, make your brand a household name, and create demand.  

Packaging 

Packaging refers to how products or services are bundled and presented to customers to influence customer perception and enhance the value proposition. If you do this right and cater to many different preferences, needs, and revenue pockets, your customers will be all over your offerings.  

Pricing Display

The way you show off your prices to customers directly impacts monetization. If you’re upfront and transparent, customers will understand the value and terms of what you’re offering. 

Pricing Strategy

Finding that sweet spot in your pricing strategy ensures that your products and services are priced in a way that maximizes revenue without discouraging potential customers. 

Revenue Booking

Keeping those books in check and properly tracking and recording of revenue ensures financial transparency and enables accurate reporting and strategic decision-making.  

Sales

The sales team’s expertise and efforts contribute to closing deals, upselling customers to splurge just a bit more, and maximizing revenue potential through effective negotiation and relationship building. 

Technology Infrastructure

The backbone of your business operation needs to be solid and reliable. With sturdy systems in place, you can streamline your sales processes, manage billing seamlessly, keep your customer relationships in check, and analyze data effectively. 

UX/UI Design

User experience (UX) and user interface (UI) design directly impact monetization. When your interfaces are user-friendly, visually appealing, free of any dark patterns, and give customers a smooth sailing experience, it boosts their satisfaction, keeps them engaged, and puts more cash in your pocket. 

The Costs and Benefits of the Different Approaches to Solving Billing Challenges 

Remember what Arnon said about a lot of people having opinions about billing and wanting to get involved? With over a couple of decades of experience working with billing under our belts, we can confirm that this is true, yet many folks also dread the idea of getting their hands on it and making decisions. Billing problems can be a real headache for businesses, but thankfully there are multiple approaches to tackle them, and this is one of the topics that Arnon put forward in the podcast.  

Each of the different approaches has its own advantages and drawbacks, and it’s important to carefully evaluate which option aligns best with your organization’s unique requirements and goals. 

Homegrown Solutions 

When it comes to solving billing needs, one option is to build your own solution from scratch. This approach gives you full control over the development process, allowing you to design and implement features that align perfectly with your business requirements. It makes sense, right? You and your team have probably already built something awesome that no one else has, so technical capability-wise, building your own, though it sits outside your core value proposition, should be a no-brainer, right? Sure, but building everything yourself can come with certain challenges. 

One challenge is the need for a translation layer to connect your product to third-party tools. This translation layer plays a crucial role in ensuring smooth integration and data flow between your billing system and other external tools or platforms. It acts as a bridge, facilitating communication and data exchange, which can be complex and time-consuming to develop and maintain. 

Another drawback of building everything yourself is the accumulation of tech debt. As your system grows and evolves, maintaining and updating your own billing solution can be a resource-intensive job. Tech debt can build up over time, as the system may require continuous development and maintenance to keep up with changing industry practices and business needs. This can lead to an increased workload for your development team, diverting their focus from core business activities. 

Building your own solution may lack flexibility compared to using purpose-built and/or pre-built software. Customizing every aspect of the billing system can result in a rigid infrastructure that is challenging to adapt as your business needs change. It may also limit your ability to leverage new features and advancements offered by specialized billing software providers. 

Also… okay. The list goes on, but if you wanna read more about this, there’s a little blog post called “The 14 Pains of Building Your Own Billing System” out there, written by Arnon himself. What a great day for reading blog posts, eh?

Purchasing Ready-Made Billing Solutions 

Choosing to purchase a ready-made billing solution from a vendor provides a quick and easy way to implement a billing system within your organization. By buying everything, you can leverage the expertise of established billing software providers and benefit from their experience in designing and developing robust billing platforms. This approach can save time and resources compared to building your own system from scratch, as you can quickly deploy the purchased software and start using its features. However, the downside of buying everything is that the off-the-shelf solution may not perfectly align with your unique business requirements, potentially leading to limitations in functionality and customization. 

Hybrid Approach 

The hybrid approach to solving billing needs combines elements of both building your own and buying everything. In this approach, organizations leverage a pre-built billing solution as the foundation and enhance it with customizations and integrations to address specific business requirements. By adopting a hybrid approach, businesses can take advantage of the out-of-the-box features offered by commercial billing software while also tailoring the system to meet their individual needs. This approach allows for a balance between customization and time-to-market, offering a flexible solution that can evolve along with the organization’s changing billing needs. However, managing a hybrid system requires careful planning and integration to ensure seamless operation between the off-the-shelf components and custom-built features. 

Conclusion

To wrap it up, we had an absolute blast exploring the world of billing and monetization in a subscription business. As we learned from the podcast conversation with Arnon Shimoni, revenue optimization is a team effort that involves various aspects such as communication, marketing, and technology infrastructure, to name a few. 

We also discovered that nailing down billing challenges can be a bit of a hurdle, but there are multiple ways to tackle it. You can choose to build your own solution from scratch, buy a ready-made one, or even opt for a hybrid approach that combines the best of both worlds. By weighing the pros and cons, you can find the approach that suits your organization’s needs. 

By recognizing the wider impact of billing and monetization, and having the right strategies in place, you can drive revenue growth and ensure customer satisfaction.