should your middle market firm shift to usage-based pricing

Should Your Middle Market Firm Shift To Usage-Based Pricing?

In Strategy Resources by Brandt A. HandleyLeave a Comment

Usage-based pricing – charging customers only for the number of products or services used – is gaining in popularity. It seems to be expanding into new realms every day. In the past, it was largely associated with utility companies. However, usage-based pricing has moved into many service based realms and is becoming more mainstream for manufacturers as well. If it’s not on your Middle Market organization’s radar, it may be worth contemplating.

Why Your Middle Market Company Could Benefit

Usage-based pricing can be of benefit to many organizations, in most channels or niches. To begin with, it usually improves your forecasting processes and accuracy. Your reporting and tracking will become more granular, which means better in and out. Also, your budgeting can become both an easier and more precise process. So, you can save money and possibly time and get better information to work with.

Additionally, customers are usually receptive to ways they can save on billing or adapt how and why they’re billed. You may even find you’ll attract some customers from competition with your innovation.

What Your Middle Market Firm Needs To Consider

Tracking and charging customers based on exactly what they use, requires ways to accurately record and track information. Your Middle Market company will likely need to upgrade or completely overhaul your billing systems. You may also need to offer new tools or technology to make it easier for your customers to implement and use your products and services. Think of some of the “easy” ordering or reordering tools online retailers have created or the tracking devices car insurance organizations have implemented. Your Middle Market company may spend a fair amount of money and time up front on research, development, and implementation before you can begin to reap any rewards.

How Middle Market Organizations Can Get Started

First, you’ll want to fully investigate exactly how usage-based pricing could be useful and look at reasons it may not work for your business model. Then, if you feel it would be advisable, start thinking about how you could offer these options and if you’d fully switch to this billing process or offer it as an option. Next, lay out what steps you’d need to take to begin tracking usage and update or upgrade your billing process. Spend some time polling your customer base about their desire or need for these options. Lastly, connect with companies who’ve both successfully transitioned and those that have had less success.

You’ll also need to figure out what software or services providers you could partner with to create or modify billing processes.

Usage-based pricing could be a great boon to your Middle Market organization in terms of financial savings, more accurate and simplified reporting and billing and give your customers a greater sense of control. It comes with some considerations, certainly, but should at least be considered.

So what’s in the Mighty Middle Market for me? — get it right now at


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