Companies now have full visibility into consumption to drive revenue forecasting and maximize customer retention
Zuora, Inc., a leading monetization platform provider for recurring revenue businesses, today announced new purpose-built consumption-based billing and consumption-based revenue recognition solutions. With these new offerings, Zuora’s market-leading solution now provides end-to-end billing and revenue recognition for consumption-based pricing, giving companies a comprehensive solution to quickly iterate across quote-to-cash and revenue accounting. By combining billing and revenue recognition capabilities, Zuora® offers the unique ability for companies to quickly go-to-market with flexible consumption models, all while maintaining revenue recognition that helps companies comply with ASC 606 and IFRS 15 standards.
As uncertain economic conditions continue, it’s critical for companies to tap into flexible monetization strategies to offer services with additional value. Zuora currently powers consumption-based pricing for over 40% of its customers, which have seen up to 22% higher net dollar retention (NDR) and 11% higher subscriber growth year-over-year (YoY) compared to their peers1. With experience powering consumption-based billing for hundreds of companies over the past decade, such as Siemens, Yotpo and Zoom, Zuora offers numerous complex models, while helping companies overcome the operational complexities that can come with consumption-based pricing.
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“Across industries, subscribers continue to demand pricing flexibility to change their subscriptions often and to pay for what they consume,” said Mathangi Ramanathan, Vice President of Product Management and General Manager at Zuora. “Businesses need the agility to experiment quickly and often, track and report on the consumption, and make it work seamlessly with their entire ecosystem. Over the past few years, many companies have adopted consumption models beyond the simple ‘pay-as-you-go,’ such as a prepaid drawdown model or multi-attribute consumption model, which creates added risk and complexity for finance teams.”
Since consumption is unpredictable and can change day to day, or even minute to minute, it can be challenging for finance teams to have full visibility into consumption across the customer base and accurately forecast for future consumption. This lack of predictability creates risk and complexity for revenue recognition. By adding a purpose-built solution for consumption-based revenue recognition, Zuora is now also helping companies better prepare and mitigate risk for the variance that can come with consumption-based pricing.
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With this launch, Zuora adds:
- Out-of-the-box monetization models, such as prepaid drawdown, minimum and maximum commit, and pooled usage pricing, enabling businesses the ability to quickly react and adapt to their customers’ needs.
- Consumption analytics, near real-time processing, and threshold notifications, enabling customers to see their consumption in near real-time and limit their spend. The same capabilities enable companies to monitor and forecast expansion opportunities for customers with high consumption.
- Consumption-based reporting, dashboards and analytics, allowing companies to operationalize and automate consumption revenue recognition policies. This enables revenue accounting teams to better predict, forecast, and mitigate financial risks related to taking on the consumption-based pricing models.
“With Zuora, we’ve implemented consumption in a variety of ways that provide immediate value, increasing flexibility for our customers while making revenue more predictable,” said Moshe Sarusi, Director of Finance Operations and Global Billing at Yotpo. “By powering these models, Zuora is a critical partner that is helping us achieve stronger retention and faster growth.”
