Happy Business Starts Here

Highlighted
New Student

Variable pricing based on usage

Hi,

 

We have a requirement for charging additional USD for support (amount in addition to the standard rate) if the usage charges go over a minimum commitment limit. In this case, we charge the greater of the standard rate or percentage of usage, whichever is higher. We have 2 usage UOMS. What would be the best approach to solve this? Will the minimum commitment extension be a good fit?

 

Example 1 - 

 

Support amount - $ 1500

Usage amount - $3000

30% of usage amount = $900 which is < $1500, so we charge $1500

 

Example 2 - 

 

Support amount - $ 1500

Usage amount - $20000

30% of usage amount = $6000 which is > $1500, so we charge $6000

 

Note that the standard amount $1500 might be billed upfront ($15000 for an annual contract  billed at the beginning of the subscription). Note also that the commitment amount might be annual, in which case, we will add up the usage each month and check against the annual amount.

 

Example 3 - 

 

Month 1 usage - 400 UOMS accumulated usage - 400 UOMS

Month 2 usage - 500 UOMS accumulated usage - 900 UOMS

 

This amount will be compared against the commit amount and then we determine the support amount. Any help would be appreciated.

 

Tags (1)