Different pricing logic for each billing cycle

Introduction

This article explains how Vendors can create complex pricing plans that allow Customers to choose their preferred Billing Frequency. Product Managers can define unique price composition logic and Discounts for each Billing Cycle separately, providing flexibility for both Vendors and Customers.

In this article:

• Understanding billing cycle pricing
• Creating billing cycle controls
• Configuring pricing for billing cycles
• Formula selection

Understanding billing cycle pricing

Vendors can configure pricing plans that offer Customers multiple Billing Frequency options with different pricing logic for each option. This flexibility enables Vendors to incentivize longer Commitment Periods through Discounts or create customized pricing structures for different payment schedules.

Benefits

• Encourage longer Commitment Periods with discounted Annual Billing
• Provide flexible payment options to accommodate different Customer preferences
• Create unique price compositions for each Billing Cycle
• Implement complex pricing strategies that reward commitment

Creating billing cycle controls

Step 1: Design the billing cycle control

1. Navigate to the Design tab in Product Management.
   
   1. Add a Radio or Dropdown control to the form.
      
2. Configure the control with options representing your Billing Frequencies:
   
   • Monthly
   • Yearly
   • One-Time Subscription
   • Custom options as needed
3. Label the control appropriately (for example, "Billing Period" or "Payment Frequency").

After designing the pricing plan, proceed to apply formulas under the Price section.

Configuring pricing for billing cycles

Step 2: Configure pricing in the Price section

Navigate to the Price tab to configure how each Billing Cycle is priced:

a. Currency: Select the currency in which prices are created. Always choose the local currency appropriate for your market.

b. Billing cycles and discounts: Select the Billing Cycle options you want to configure:

• Monthly Billing
• Yearly
• One-Time Subscription
• Use custom control (allows you to use the Radio or Dropdown control created in the Design section)

c. Commitment control: Select the commitment control option:

• Charge Period: Links pricing to the selected Billing Frequency
• None: No commitment-based pricing logic

d. Billing cycle: Select how the Billing Cycle is determined:

• As in Plan: Uses the Billing Cycle defined in the pricing plan
• Monthly Billing: Forces monthly billing
• Yearly: Forces Annual Billing
• One Time: Configures a One-Time Subscription

Formula selection

e. Formula: Choose the formula section applicable to your designed pricing plan. Different formulas enable different pricing strategies:

Choice price table: Use when pricing depends on specific combinations of control values. Ideal for complex configurations where different selections determine the final Price.

Constant: Use when providing a fixed Price that doesn't vary with Quantity. Suitable for flat-rate Offers or standardized pricing.

Quantity price table: Use when pricing varies based on Quantity purchased. Supports tier modes (Volume, Graduated, UpTo) for bulk pricing strategies.

Per usage: Use for Usage-Based Subscriptions where pricing is calculated based on consumption metrics rather than fixed Licenses.

Each formula type can be configured differently for each Billing Cycle, allowing Vendors to create sophisticated pricing structures that encourage desired Customer behaviors.

Summary

Vendors can configure complex pricing plans that offer multiple Billing Frequency options with unique pricing logic for each option. Product Managers create Radio or Dropdown controls in the Design section to represent Billing Cycle choices, then configure pricing behavior in the Price section. Configuration includes selecting currency, defining Billing Cycles and Discounts, setting commitment controls, and choosing appropriate formulas (Choice price table, Constant, Quantity price table, or Per usage). Each Billing Cycle can have its own price composition logic, enabling Vendors to incentivize longer Commitment Periods through Discounts or create customized pricing structures. This flexibility accommodates diverse Customer preferences while supporting strategic pricing objectives.