New capabilities provide agility and insights to power consumption-based models
Zuora, Inc., a leading monetization suite for modern businesses, at Subscribed Connect London expanded Zuora for Consumption with a native Mediation Engine. Zuora for Consumption provides a holistic solution to scale consumption-based offerings, helping companies price on different models, meter raw usage events across devices and services, inform customers of consumption in near real-time and is purpose-built to recognize revenue for consumption.
New technology and fierce competition are compelling businesses to monetize their products in new ways, with a significant shift toward consumption-based models. According to new research from Zuora’s Subscribed Institute and Boston Consulting Group (BCG), nearly half (46%) of companies analyzed implemented some form of consumption-based pricing in the last three years, and hybrid consumption models, businesses that drive both recurring and usage revenue, increased almost 3X (from 9% to 26%) between 2020 and 2022.1 New technology, including the explosion of artificial intelligence (AI) and the Internet of Things (IoT) is also expected to drive adoption of consumption-based models.
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“With its new Mediation Engine and the ability to monetize consumption, subscription and one-time transactions together, Zuora is providing the revenue platform of tomorrow and powering businesses with complex consumption-based models”
However, identifying the right consumption-based model often takes iteration. It’s important for companies to be able to adapt as customers’ needs and economic conditions change to create ongoing value and predictability. While tracking consumption produces a wealth of data on how a product is used, translating this unpredictable raw usage into the right pricing model can be challenging and complex. With Zuora’s Mediation Engine, companies can now create flexible meters and consolidate usage data, unlocking new customer insights to rapidly experiment with pricing and better align with customer value.
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“Modern businesses are driving recurring growth through a deep understanding of how subscribers consume their products,” said Kyle Kolich, Vice President, Product Management, Billing at Zuora. “Zuora’s new native Mediation Engine helps make this possible, integrating metering capabilities and pricing recommendations that improve consumption visibility, accelerate growth and even identify future opportunities to monetize.”
Part of Zuora for Consumption, the new Mediation Engine includes:
- Ability to ingest raw usage data at 200k events per second2
- Out-of-the-box metering components to aggregate, enrich and transform event data through a drag-and-drop user interface (UI)
- Ability to apply custom, proprietary logic to meters
- Auditable usage recording tracking throughout rating, billing and revenue recognition
