The launch of Tesla’s Autopilot Full Self-Drive feature subscription service by the end of 2020 could signal a shift in the way the automotive industry does business.
Elon Musk, Tesla CEO and Co-Founder, has topped lists including Forbes Most Innovative Leaders and Forbes World’s Most Powerful People. He’s renowned as a forward thinker and visionary, one whom people trust to clearly envision the future.
“I’m interested in things that change the world or affect the future,” said Musk in an interview with Scott Pelley. “And wondrous, new technology where you see it, and you’re like, ‘Wow, how did that even happen? How is that possible?'”
According to Musk, the future gives consumers not just new ways to drive, but also new ways to pay. New options around subscription billing allows users to try new technologies with limited financial risk by opening up an option to pay as they use. Tesla is already known as an industry leader, always on the forefront of impressive, edgy technology. But this new feature-gating subscription billing model might be the push the automotive industry needs to align their desire for consistent revenue with the consumers desire for more power over their finances.
Subscription billing is not new to consumers. Everyone from gyms to Netflix have been using it for years, allowing customers to pay for tools and services on a monthly basis. This works well for businesses and consumers alike, because it allows flexibility while enticing an eager customer base to try innovative products with reduced risk.
Events-Based Billing is the next generation of the subscription model, allowing companies—especially B2B SaaS companies—to adopt truly customer-centric pricing. It works by streaming and rating event data (any action taken within a platform) to charge clients a fully-customized price based on their specific use case. Businesses employing Events-Based Billing can charge based on any defined aspect of their data including videos watched, messages sent, or even miles driven.
This could mean everything for the future of the automotive industry, whose billing practices haven’t changed much over the last hundred years. Without a strategic monthly revenue plan, car manufactures are susceptible to the ebbs and flows of the economy, readily succumbing to recessions and needing government bailouts over time. Subscription billing has already proven to be an extremely successful model for a wide range of companies, whether they sell high tech software or just a really good razor. Elon Musk seems to think it’s finally time for the automotive industry to catch up.
It’s time for B2B SaaS companies to catch up too, by trading in their outdated subscription billing model for an event-based one.
Consumers are already familiar with consumption billing—think of expenses, like electricity and water. But what if those services weren’t simply charged on how much or little you use (standard consumption billing), but also included variable like:
- Usage at peak or non-peak times of day
- Where in the house the utility is being used
- How many sources are being tapped simultaneously
- Who is using it
While this example sounds silly in this context, that’s the power Events-Based Billing offers. It’s a step beyond the consumption model. The ability to stream and rate multiple attributes makes Events-Based Billing the most flexible, value-based billing model in existence.
SaaS companies like Amazon Web Services (AWS) and Twillo have already capitalized on the flexibility of this approach to expand market share, and it’s leading a change in the way people do business globally.
“The smartest people are constantly revising their understanding, reconsidering a problem they thought they’d already solved. They’re open to new points of view, new information, new ideas, contradictions, and challenges to their own way of thinking.” - Jeff Bezos, founder and CEO of Amazon.
As many leaders across the world are beginning to understand, Events-Based Billing is the future and the possibilities are endless. Just ask Elon Musk.
Learn more about Events-Based Billing for your business.
Historically, Events-Based Billing technology has only been available only to large companies with the resources to build this advanced infrastructure themselves. Thanks to Chargify, it’s now available to everyone. Click here to learn how your business can implement Events-Based Billing to deliver truly value-based pricing to your customers.