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variable usage rates

Valued Scholar

variable usage rates

Has anyone else run into the use case where you are billing for a usage-based charge variable rate? If so how did you support this?


In my specific example...

We have SMS fees that vary by country based on the SMS service provider's rates. These country-specific fees change monthly (as do exchange rates). 


Any recommendations on how to set this up in Zuora?

Zuora Alumni

Re: variable usage rates

Hi---I am not aware of any customers currently doing this. It is an interesting question and one that I will need to take some time to look into. I will update the thread shortly with any information I find out. 




Re: variable usage rates

One take on this would be to report the usage in as dollars rather than normal units. This how we have been testing part of usage for PS.


So you would make a usage charge for SMS that is $1 per unit. When you report units in, you would actually be reporting dollars. To track and show to the user their actual usage you could record that on a usage custom field.


So your usage record might look like:

Quantity = 25.00

Units__c = 100

PricePerUnit__c = 0.25


The two custom fields are only for display purposes on your invoice so you could show the breakdown of the usage charge, but the dollars would be calculated from the Quantity of 25 multiplied by the per unit usage charge of $1.


This basically delegates all usage rating to your external system that determines the country specific fees and pushes the resulting value in.

Newly Enrolled

Re: variable usage rates

I have had a similar thought for using variable usage charges, but hoping for a greater level of variability in that prices will be set on a bid model and us such the price could be anything. The only way that I can think of is to create as many rate charges as needed to cover any price that might be a winning bid, then record the quantity of usage at that price. It means that I would need to restrict the variability somewhat, perhap 5c increments, so that the number rate charges don't go over the top.


For your case (or anyone following as I hope you have sorted something out by now), one option, though maybe not ideal, is to have all costomers on a monthly term that renews at the start of the each month. Set the rate plan charge to renew to the current price and update the price of the product to be effective before all the renewals take place. That way you can set a new price to be active for a month and any number of customers using that rate plan will pick up the new price.


That method does have inherant restrictions like you can only change price for the start of the month, and everone will need to be prorated for a partial month or one + partial month at the start depending on where in the month they signed up, but that is made easy in Zuora. The other major restriction is about the term, you can either have thie work like "evergreen" and just go on renewing monthly terms indefinitely, or have a limited number of monthly terms but that won't actually allow for standard renewal. If you set 12 month terms, a renewal would be a term amendment where you change the subscription to 24 month long terms.