In our previous blog, we discussed what a hybrid billing model is and how to make the most of it. In this section, we will discuss the different types of hybrid billing models and their benefits.
The hybrid billing model not only gives your businesses the opportunity to stand out amidst a plethora of subscription-based service providers but also, diversifies your revenue streams. Here are the three types of hybrid billing models organizations can adopt based on their business requirements:
Tier-based Billing Model: Tier-based billing is considered one of the most natural hybrid pricing models as it gives companies control over their consumer’s perceived value of their offering.
Microsoft 365 has curated tier-based pricing, where one has to pay ₹6199 for the family pack and ₹4899 for the personal pack. The family pack suits best to those who want to share the software amongst two to six people as each person gets storage of 1 TB. On the other hand, the personal pack is best for an individual user.
Freemium Model: This introductory tier is possibly the best way to introduce a hybrid billing model to your already existing subscription model. Introducing a freemium model helps attract more customers and if your offer addresses their needs successfully, they can convert easily into buyers. Moreover, it enables the customers to try the offering before they commit, to feel more valued.
Amazon Prime has been promoting its free trial period, and now has a huge subscription base.
Mix and Match Billing Model: The best part of the hybrid billing model is that you can experiment by combining different types of pricing models. Every business has a unique offering, feature, and requirement. Accordingly, their billing model should also vary to gain maximum profit.
Airtel has a fixed subscription price for their data packs. But if you consummate your daily quota, you can add on data with some extra cost.
Hybrid pricing strategies combine recurring billing with one-time sales to better align with the value and price of subscription services and scale market share.
Benefits of Hybrid Model
The hybrid billing model creates a win-win situation for both the business and the customer. It offers a transparent billing status to the customers with an easy to define pricing structure. Businesses can further improve customer experience by collecting customer data based on their usage and creating more personalized offerings and targets.
The hybrid billing model allows businesses to create a sales experience focusing on product value. This enables businesses with better control of their consumer experience and keeps the sales process simple and free from numerous bundles.
It is not easy for businesses to create subscription packages that will address the unique needs and demands of every customer. Implementing a hybrid model will free your business from the pressure of curating bundles that will fit all your target products and services. Moreover, you can decide on individual product or service pricing to set a billing structure that generates actual value. Thus, it is time to look beyond the subscription model and adopt a hybrid billing model.
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