BusinessAugust 1, 2022

Personalize Customer Experiences with the Hybrid Billing Model – Part 1

Across industries, businesses are resorting to the subscription model to cater to the variety of service demands in the most personalized form. This is primarily because of the evolution of customer expectations that have changed several business procedures.

Unfortunately, not all businesses can leverage the benefits of subscription billing model. Do we have an option for them? Yes, organizations that are unable to integrate the subscription model into their existing business, are finding hope in the hybrid model. Implementation of a hybrid billing model enables you to continue billing your customers fairly and accurately to keep your recurring billing and payment processing streamlined.

What is Hybrid Billing Model?

The growing subscription management process is undergoing several adaptations to create better scope for personalized business offerings. Hybrid billing model amalgamates both traditional and subscription models to keep up to the benchmark in this customer-driven and hyper-competitive marketplace.

It provides the best of both usage-based and fixed billing models that enable customers to make the most of your business offerings. When the convenience of the subscription model meets the cost-effectiveness of traditional billing, it saves both time and money for the end customers. As the hybrid model addresses customer demand in a more personalized manner, it can generate more revenue.

Get the Best of Both Worlds

Customizing subscription packages, specific to just customer needs is not always possible as such businesses depend on monthly or annual recurring revenue to keep the business running. Thus, customers are charged on a recurring basis for a product or service, with the only option of renewing or cancelling. For example, Spotify charges a fixed amount for premium service that allows users to not only to listen to music ad-free, but also download songs. Someone might not be interested in downloading songs, but pays the same fixed amount, just to get access to ad-free music.

This eventually pushes customers to pay for a part of their subscription package that they might not be interested in or miss out on something they want. In such a scenario, a hybrid billing model comes to the rescue. It enables customers to add a subscription package based on their price point and other requirements, along with one-time purchases.

With the subscription model, customers are not completely in control of what they pay for. While in the hybrid model, customers can add specific services or products to their cart, besides their fixed purchases. This makes them feel special as your business gets a chance to portray customer value.

Dropbox is a great example of hybrid billing model. Their upgraded plans for cloud storage, and file synchronization are priced on a per-user basis.

How to Integrate a Hybrid Model Seamlessly into your Existing Business?

The billing and payment management processes of the hybrid model may not be as streamlined as the subscription model. Thus, to avoid complexity in the process and to maintain internal accounting, you need to synchronize your business methods. Here is a list of tips that you need to follow for a frictionless hybrid billing model:

  • Create balanced product catalogues that will make it easier for both the new and existing customers to browse through your fixed offerings along with add-ons.
  • Make sure your payment system is in place so that customers can pay for both the fixed and add-on purchase through one transaction.
  • Update your billing and payment software according to the needs of the new business model.


There is no doubt that the subscription model industry is booming at a rate of 200% per year. But if your business seeks a more customer-centric billing structure to overcome the disadvantages of the subscription model pricing structure, the hybrid model is the answer.

At Magnaquest, we will help you to understand which billing model will suit best for your business. Our signature product, Sure, will guide you through your entire billing process and help you integrate the same into your existing business model.