Events drive your SaaS business. Not the events you travel (or in these days, log onto Zoom) to attend, but the actions your customers make that ultimately shape the success of your business.
Customer actions happen constantly in your SaaS business, whether you’re tracking them or not. Every pageview, form fill, click, email open, product search, you name it, can be logged as an event. This event data describes unique customer interactions that can be analyzed and monitored for business growth. Product and application data is equally common in your business and critical to your data analytics. Think of this data as events that originate from a programmatic input or in response to a user action. The sensor measurements of the smart thermostat you use to adjust the temperature of your home or an API call to write to/read from a database are two examples of application and product data in action.
How to think about event data.
As the name suggests, event data allows you to collect insights from activities that provide a granular and real-time look into key aspects of your business. (For example, your product, application, or customer behavior.) Because events cover a wide variety of activities across many categories of interactions, event data paints an intricate picture of how your customers are interacting with your product.
Most databases are designed to store entity data and are often referred to as relational databases. While this framework is amazing for complex data exploration, it runs into challenges when trying to capture, store, and analyze data at scale.
Event data, on the other hand, doesn’t just describe entities; it describes the real-time actions performed by entities. This non-structured approach to data collection enables you to describe and log actions in real time.
Now, consider the sheer volume of data generated daily by your business. For every one user in your application(s), you might have hundreds, even thousands of events. A relational database would have a hard time keeping up with this compounding activity data and would cost you valuable time and resources for storage and querying. Unstructured databases (e.g. Apache Cassandra, MongoDB, etc.) are designed to work with big data and elegantly solve this problem. These more flexible data solutions enable massive volumes of event data to be streamed, stored, and used for cutting-edge applications like machine learning, artificial intelligence, and predictive analytics.
Using event data as a competitive advantage.
By paying attention to your event data and incorporating it as one of the key business metrics you’re tracking, you can:
1. React in real-time to stay ahead of the competition.
Since event data is tracked and recorded in real time, you’re able to interact instantaneously with your prospects and customers. An events-driven architecture combines data-pattern identification with automatic alerts and notifications to targeted customers. Proactive customer engagement (like sending an automated email when a customer takes a specific action) can help you prevent churn and keep customers engaged and happy.
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2. Deliver ultra-personalized customer experiences.
In addition to knowing when an event occurred, event data gives you additional attributes about who took that action. You can use this data (such as name, geographic region, and web browsing patterns) to build curated workflows and automated response triggers. Understanding how individual users consume your product enables you to create a tailored strategy for different customer segments. When an event occurs, it can set off a reaction that follows your specified rules and workflow to achieve objectives like increased conversion or retention rates.
3. Show (don’t tell) the value you’re providing your customers.
By embedding analytics into your applications, you can clearly demonstrate the value your customers are receiving from your product. For example, Chargify offers custom analytics around all a customer’s revenue transactions. With our dunning report (and supported collections workflows), customers can take instant action based on their data and have noticed that they are now able to collect more payments than before (often covering the cost of their Chargify subscription). Customers see this value directly in the application, which reinforces the benefits they receive from our solution.
4. Discover trends over time (and predict future business tendencies).
Utilizing predictive models and event data, you can study past trends to positively influence future ones. Say you want to take positive action to upsell your best customers to a higher tier of services. To do that, you must first have extensive knowledge of which customers upgraded in the past and why. Event data such as demographics, customers’ plan or subscription level, and product interaction behavior can help you identify customer patterns like this. The more you know about why a customer makes a certain decision and how they interact with your product, the more empowered you are to make real-time decisions that better engage them.
5. Grow your product revenue and customer value through innovative big data analytics.
Big data is revolutionizing the way businesses operate. By integrating the sophisticated data analytics infrastructure required to capture event data with technologies like machine learning and artificial intelligence, businesses can further refine customer segments and product offerings for improved retention and increased revenue. It’s this data strategy which allows the Netflixes of the world to capture all their customers’ event data and use it to offer curated, personalized recommendations (improving adoption, reducing churn, and maximizing revenue).
If events drive your business, shouldn’t event data drive your pricing?
You’re probably already familiar with usage-based pricing. Often referred to as metered billing ro consumption pricing, this pricing model charges customers based on what they actually consume (like how a cell phone provider may charge on the amount of data used), versus a subscription pricing model in which the user is charged a flat-rate fee, regardless of how often they use the service. Think of Events-Based Billing as usage-based pricing on steroids. Both are effective pricing models in their own regard, but Events-Based Billing offers customers unparalleled value by directly appropriating charges to usage. A user is only charged for billable events, if and when they’re taken.
Amazon Web Services (AWS) pioneered the events-based billing model and popularized it among the developer community in 2006 by offering granular, customizable pay-as-you-go pricing for their cloud and web services. They utilize event data to only charge customers for the individual services they use, for the exact way that they use them (e.g. storage amount, request type and amount, data transfer amount, etc.), without long-term binding contracts. Their innovative events-based billing model is one of the groundlaying reasons AWS grew from an idea to what is now: Amazon’s fastest-growing source of revenue.
Both usage and Events-Based Billing charge on usage quantities, but it’s the ability to segment and rate multiple attributes in real time that makes Events-Based Billing stand out as a next-generation pricing model. Take a Communications Platform as a Service (CPaaS) pricing example. With a usage-based pricing model, the price a customer is charged for sending a text message relies on a single billable metric (the text message being sent). While this is still an effective way to bill—and definitely better than paying a flat rate for the mere ability to send texts—there’s room for improved customer value.
With an Events-Based Billing model, the price a customer is charged for sending a text can consist of a number of different (but related) events, like when the text is sent, the length or type of the text (MMS vs. SMS), and if it was or wasn’t received, to name a few. This strategy offers a much more customized pricing model that’s directly related to the value your customer is receiving from your service.
Events-Based Billing is the next generation of billing for SaaS companies. If you want to experience the success of industry-leading billing models (like those employed by AWS) but don’t have the resources to build your own events-based billing architecture, now you can. Chargify’s Events-Based Billing offers you an out-of-the-box solution for creating complex, value-based pricing models. No downtime to develop a homegrown billing solution. No massive budget constraints to pay for the buildout. All you have to do is work with our team of billing and data experts to customize our proven Events-Based Billing model for your company, so you can start billing like the industry titans.
Harness the endless possibilities of event data to grow your business.
Chargify offers much more than billing and subscription management for B2B SaaS companies. We’re also the only subscription billing solution that enables you to capture and process event data in-house, without needing a third-party application. We help you access and analyze your event data, so you can build a custom usage-based pricing strategy that drives ultimate value for your customers.
For the first time in SaaS billing history, companies everywhere can now easily bill like the biggest software and service providers in the world, thanks to Chargify’s Events-Based Billing.
But Events-Based Billing isn’t the only way to harness the power of event data to give your business a competitive advantage in the subscription market. Chargify Business Intelligence enables you to create custom metrics and dashboards based on your event data, so you can make strategic business decisions about the future of your business.
You can do it all with Chargify. Reach out to our team today to unlock the untapped possibilities of your event data and start making revenue-driving decisions for your company.