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Does Chargify Support My Pricing Model?

More and more, the answer to that question is "Yes!"

But the details are getting more complex as our merchants try more business models and we add more functions, so we've come up with some example scenarios here to help you if you're wondering about your pricing model.

1. Simple, Flat-Rate Billing

Let's say you have a business that charges for access to data in a database you've compiled from many sources. Your customers are professionals who save a lot of time by accessing the data you've compiled. You want to charge them $25/mo, $50/mo, or $100/mo, depending on what level of access they want.

To do this, you will set up 3 Products in Chargify:

  • Plan A: $25 per billing period. Period = 1 month.
  • Plan B: $50 per billing period. Period = 1 month.
  • Plan C: $100 per billing period. Period = 1 month.

2. Flat-Rate Billing, Monthly & Yearly, 15-day Free Trial on Monthly Plans

Starting with example #1, let's add a yearly plan that gives the buyer a better deal if they pay for the whole year, and let's add a 15-day free trial to all the monthly plans.

To do this, you will set up 4 Products in Chargify:

  • Product A: $25 per billing period. Period = 1 month. Trial period = 15 days, trial cost = $0.
  • Product B: $50 per billing period. Period = 1 month. Trial period = 15 days, trial cost = $0.
  • Product C: $100 per billing period. Period = 1 month. Trial period = 15 days, trial cost = $0.
  • Product D: $899 per billing period. Period = 12 months.

3. Billing for Number of Items Consumed

Let's say you have a business that allows your customers to buy sales leads for their business. You only charge them when they buy leads from you. You have 2 types of leads: "Just Shopping" and "Ready to Buy". The ready-to-buy leads are worth more.

In Chargify, your customer must have at least 1 recurring subscription with you, but that subscription can be free. You will use "Metered Components" that are added to that subscription to bill your customer for any leads he got. If he didn't get any in a given month, then his bill will be $0.

You will set up 1 Product and 2 "Metered Components" in Chargify:

  • "Sales Lead Central Membership" (product): $0 per billing period. Period = 1 month.
  • "Just Shopping Lead" (metered-usage component): $10
  • "Ready to Buy Lead" (metered-usage component): $25

Chargify "Components" are set up using our admin web interface, but to use them (to apply them to your customers' subscriptions), you have to use our API. Your system will make an API call whenever your customer buys leads.

Chargify will assess the charges to your customer each month because of the free membership subscription he's got with you. When we do that assessment, we will also count up the sales leads he bought and add the appropriate charges ('a' x $10, plus 'b' x $25). The number of leads is automatically reset to zero for each new billing period.

Metered-Usage Components are perfect for items that are consumed by your customer anytime, but billed by you on a regular schedule.

Think of text messages, cell phone minutes, gigabytes, sales leads, bottles of wine, gallons of fuel, etc.

4. Billing for Number of Items in Use

Let's say you have an online accounting system. Your customers are other businesses. You charge each of them $100/month, plus $25/month for each of their staff members who have access to your accounting system. It does not matter if those staff members actually use your system... merely having access in a given month is what your customer is paying for.

You will set up 1 Product to collect the base fee of $100/month, plus 1 "Quantity Component" to capture the fees for your customer's staff members:

  • "Acme Online Accounting" (Product): $100 per billing period. Period = 1 month.
  • "Gold User" (Quantity Component): $25

As in the previous example, Chargify "Components" are set up using our admin web interface, but to use them (to apply them to your customers' subscriptions), you have to use our API. Your system will make an API call to set the number of "Gold Users" (quantity component) for your customer.

So, if your customer has 3 employees who will access your system, then your system will make an API call to tell Chargify that the quantity of employees for that customer is 3.

Chargify will assess the charges to your customer each month because of the base $100/mo membership subscription he's got with you. When we do that assessment, we will also check the current count of "Gold Users" and add the appropriate charges ('a' x $25). Note that Quantity Components are NOT reset to zero; they are never changed unless you call our API and change the quantity. This makes sense for the kinds of things where businesses charge for a continuing quantity of something.

Quantity Components are perfect for items that are continuously used by your customer and billed by you on a regular schedule.

Think of software licenses sold to a single company (the example above), students in a class (paid by one household), employees in a benefits management service (paid by one employer), etc.

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3 Comments

  • 0
    Avatar
    peter pan

    Hi,

    Is there also an option to give people a discount on their monthly price is they opt for a longer contract term: let say the normal price is $299 per month OR $199 per month on a min. 12 month contract (paid per month).

    Thanks,

  • 0
    Avatar
    Atul Paradkar

    I want to setup a pricing structure where customer can buy number of seats on a license. Customer can increase or decrease users anytime. I can setup where license is a product and use components for numbers of users for the license. But component does not do prorations, so customer can buy 1 seat on day 1 and add 20 seats on day 2 and get all 20 seats free for rest of the month.

    What are my options on the setup of this type of product where customers cannot get free month?

  • 0
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    Lise Andersen

    HI I'd like to set up a membership fee that is billed annually but is – at the time of sign up – only charged from the date of purchase until years end. After the (remainder of) the sign-up year, the member should then be charged annually Jan 1 of every year.

    Is this possible?

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