Unlocking Pricing Flexibility with Togai’s Entitlements

12 Mins Read
Kavyapriya Sethu
Published On : 12/07/2023

We are excited to announce the launch of the Entitlements feature, a powerful addition to our pricing, metering, and billing platform, Togai. With Entitlements, businesses can now offer their customers on-demand access to specific features, while efficiently managing feature usage based on different pricing packages. This highly customizable solution allows businesses to implement prepaid usage-based pricing (UBP) models with ease, making Togai the go-to platform for implementing flexible pricing strategies.

The Problem: Managing Feature Usage and Setting Limits

In today's competitive business landscape, providing flexible pricing models that cater to your customer’s needs is essential. Because of this, multiple pricing tiers, each with different sets of features and limitations, have become more common. With usage-based pricing gaining popularity, companies face the challenge of effectively managing feature usage and aligning it with the customers' chosen plans.

Without a robust mechanism in place, businesses struggle to enforce feature limitations and notify customers about their usage levels. The absence of a gatekeeper leads to increased customer support efforts and potential revenue loss due to feature overuse.

The Solution: Entitlements

With the introduction of the Entitlements feature, Togai empowers businesses to seamlessly address the challenges associated with managing packages and feature usage management.

A screenshot of the Entitlement Plan1 of Togai

What Are Entitlements?

In a pricing plan, the end customer is granted specific functionalities or features that they are entitled to. These are known as entitlements. It allows you to create a customized shopping cart experience for each of your customers. For example, take a subscription-based streaming service. A customer with the "Premium" plan is entitled to ad-free streaming, HD video quality, and access to exclusive content.

In other words, entitlements serve as a set of permissions that determine what actions a customer can perform within a software application.

What is the importance of Entitlements?

Entitlements play a crucial role in modern business models, and here's why you should care about them:

  1. It allows you to create customized experiences for your customers. By defining specific permissions and access levels based on entitlements, you can offer differentiated feature sets, pricing plans, and service levels.
  2. You can implement flexible and dynamic pricing models by defining different tiers or packages with varying feature sets and usage limits. In doing so, you can attract a wider customer base and maximize revenue generation.
  3. You can control resource consumption and prevent the overuse of specific features.
  4. Entitlements provide opportunities for upselling and cross-selling. By offering additional features or higher-tier plans, you can encourage customers to upgrade their subscriptions and unlock more value.
  5. By providing a personalized experience, you can enhance customer satisfaction and increase their likelihood of staying with the product.

Key Requirements for Each Role

Stakeholde Requirements
Product Manager
  • Add a new entitlement to an existing plan
Engineering
  • Use a single system of truth for entitlements
Sales
  • Edit certain entitlements for an enterprise deal
  • Modify values of value-based entitlements during a negotiation
Billing
  • List specific entitlements on the invoice
Customer Support/Success
  • Find the plan and corresponding entitlements for a given customer
  • Assist customers in upgrading plans or buying additional units of value-based entitlements
End Customer
  • Check the usage of entitlements
  • Receive notifications when close to exhausting the entitlement
  • Purchase more units or upgrade the plan

Unveiling the Complexity of Entitlements

Entitlements, on the surface, may seem straightforward: customers are entitled to certain functionalities or features based on their chosen plans. However, as you delve deeper, you'll encounter layers of complexity that must be carefully managed.

One common pitfall is the tendency to hard code entitlement logic directly into the software's codebase. This approach not only limits flexibility but also makes it difficult to modify or update entitlements as business needs evolve. Hard coding the logic also hampers the ability to experiment with different pricing models or introduce new features without significant development effort.

There is also the challenge of defining and configuring entitlements accurately. This involves mapping specific features to different plans, setting usage limits, and establishing rules for feature availability. Each aspect requires careful consideration to ensure that entitlements align with the desired pricing strategy and customer segmentation.

Next, the tracking and monitoring of entitlements in real time can be a significant technical undertaking. It requires robust infrastructure and precise calculations to provide customers with up-to-date information about their usage.

Furthermore, the dynamic nature of entitlements necessitates the ability to handle changes seamlessly. As customer needs evolve, you must be able to modify entitlements, add new features, adjust pricing tiers, or introduce time-limited promotions. This requires flexible tooling and a well-designed system that allows for easy configuration and management of entitlements.

Togai empowers businesses to effectively manage entitlements, optimize pricing, and enhance the customer experience. You can effortlessly map features, set limits, and align entitlements with pricing strategies. Its robust infrastructure allows for monitoring usage and providing up-to-date information to customers.

Use-Case: Cloud Storage Service

To illustrate the power of Entitlements, let's consider a B2B scenario where a company provides a cloud storage service to its business customers. The company offers prepaid usage-based pricing with entitlements to align with various customer needs.

Suppose the company has a plan called "Basic Storage" with a monthly entitlement of 100 gigabytes (GB) of cloud storage space, priced at $50 per month. This entitlement ensures that customers can consume up to 100 GB without incurring additional charges.

If a customer exhausts their 100 GB entitlement before the month ends, they have several options. They can choose to upgrade their plan, purchase additional storage, or wait until the next billing cycle. By setting up the entitlement checks, businesses can allow customers to purchase extra storage beyond their initial entitlement, such as an additional 20 GB for $10.

Let’s look at these benefits in more detail.

Benefits of Entitlements in Prepaid Pricing Models

Entitlements prove to be invaluable in prepaid models, as they allow businesses to:

Map, and Bundle Features

You can map features to different plans, or bundle additional features with higher-tier plans. This level of customization allows businesses to offer diverse pricing options and cater to specific customer segments.

For example, in the cloud storage service use case, you can offer a "Business Plus" plan that includes increased storage capacity and advanced security features like encryption and access controls. By bundling these features, you can cater to businesses with higher security requirements and offer a comprehensive solution.

Control Access to Specific Features

You can control whether a customer has access to a specific feature or not. By setting up feature gate checks, businesses can tailor feature availability based on the customer's chosen plan or package. This enables businesses to offer differentiated feature sets to different customer segments. Feature gates are commonly used to create tiered pricing models or to provide exclusive features to premium customers.

For example, customers on a "Business Storage" plan may have access to advanced file versioning and revision history features, while customers on a "Personal Storage" plan may have limited access to these features. This differentiation in feature access based on entitlements allows businesses to offer more robust collaboration capabilities to their business customers while providing a streamlined and focused experience for personal users.

Capping Metered Feature Usage

You can set usage limits for specific features and proactively alert customers when they approach or reach those limits. This not only prevents overuse but also provides transparency and helps customers make informed decisions about their usage.

For instance, with entitlements in place, you can set a monthly cap on the amount of data transfer allowed for customers on a specific plan. Let's say the "Business Storage" plan offers a monthly entitlement of 500 GB of data transfer. When a customer approaches the limit, they receive a notification informing them about their usage and suggesting options such as upgrading to a higher-tier plan with increased data transfer limits or purchasing additional data transfer capacity.

Maximizing Transparency with Real-Time Usage Calculation

One of the key advantages of utilizing entitlements with Togai is its ability to provide real-time usage calculation. By continuously monitoring and tracking resource or service usage, Togai ensures that customers have accurate and up-to-date information about their usage levels. This level of transparency empowers customers to make informed decisions regarding their plans and take necessary actions to optimize their usage.

Conclusion

Entitlements with Togai is a perfect solution for prepaid usage-based pricing. Businesses can now manage feature usage, enforce limitations, and offer flexible plans to their customers. Moreover, they can streamline their pricing strategies, boost customer satisfaction, and optimize revenue generation.

Visit our website or get in touch with our team to learn more about how Togai can help you implement flexible pricing models that meet your customer’s unique needs.

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Nikhil Nandagopal, Founder
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WRITTEN BY
Kavyapriya Sethu
Spends most of her time reading books and making fictional characters her best friends. Likes trying new things: new cuisines, films, languages…you name it!
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