Pillar 3 - Metering
In order to bill customers for feature access, their use of the product is tracked in an append-only log.
Each increase or decrease of use of a feature (whether a measure feature such as "disk space" or "bandwidth", or a countable quantity such as "seats") is tracked in the log.
Each entry contains:
- The unique identifier of the customer.
- The feature identifier (as referenced in the Model)
- The increase or decrease amount.
- The time that the increase or decrease was made.
There is no requirement that every metered feature is a monetized feature. Typically, a product's major features and metrics of usage must be known well in advance of discovering the optimal pricing scheme. Gathering high-quality metrics about real-world feature usage can be central to understanding how a product should be priced.
Thus, anything that can potentially be a restricted or monetized feature is tracked in the metering system, even if the current price (as defined in the model) is 0.
Metering can be done in a variety of points in time, as appropriate. The two common modes are:
- At the time of feature usage. For example, every time the customer adds a new seat to their account, uploads a file, or runs a report, the application can emit a metering event. This is best for low-frequency events with low performance sensitivity.
- In a regular roll-up. For example, on an hourly basis, the number of requests and bytes downloaded by customer is reported. This is best when performance is critical, and events are frequent.
Values Provided By This Pillar
- Even in products with a flat base plan price, it is important to understand how customers interact with the product.
- Prices and plans can be defined based on any combination of feature usage, making it easier to adapt in the future.
- Because every metered feature is a reference to the same feature identifier in the model, it is easy to correlate usage to value generation, improving growth and user success processes.
Using This Pillar in Isolation
It is extremely common for feature usage to be tracked without ever attaching prices to usage, for all the obvious benefits of visibility.
However, unless metering is integrated into a pricing scheme, it is not properly a part of a company's PriceOps methodology.
If reported metrics are defined in an ad hoc manner, and not connected to the pricing model, then it is likely that the data will become difficult to interpret over time, even if it is useful in the short-term for product visibility.