Edit tiered revenue model pricing

Different pricing configuration options are available for each revenue model (free, one-time, recurring, and tiered). This page explains how to configure pricing for the tiered revenue model. For descriptions of all the revenue models, see Edit revenue models.

The tiered revenue model is like the recurring revenue model with the additional benefit of offering customers a choice of prices based on different billing frequencies. An unlimited number of price tiers can be configured with different billing frequencies, pricing structures (for example, flat and price per unit), contract durations and terms, etc. This is most commonly used to define monthly and yearly rates for the same add-on.

On the Prices and Editions tab, the price options are displayed with the add-on:

During checkout, customers choose a price by selecting the associated billing cycle from a drop-down list:

To edit tiered revenue model pricing

1. If you are not already on the Manage Add-On Pricing page, click Manage > Billing and Distribution > Products > productName | Edit > Connections & Pricing | Pricing. The Manage Add-on Pricing page opens for the selected add-on product.

2. If you have not already done so, from the Revenue Model drop-down list, select Tiered. The Tiered Price section appears.
   The pricing tiers can be any combination of the following options displayed in the Payment Plans area:

   • Free trial period and Expired free trial grace period
   • First pricing structure
   • Flat rate price
   • Price per unit
   • Usage restrictions
   • Dependent setup fee
   • Setup fee
   • Contracts
   • Additional pricing tiers

3. In the Pricing Plan section, select Rank to display this as the primary price for the add-on.

4. In the Pricing Plan section, from the Billing Frequency drop-down list, choose one of the options available. The prices you configure in the sections below are invoiced to the customer at this frequency.

5. Select one of the following pricing options for this add-on:

   • Flat Rate Price—The add-on is sold to customers for a flat fee charged at a set frequency. When customers purchase the add-on, quantity is not applicable (they purchase an implicit quantity of one). For example, $5.00 per month for the add-on.
   • Price Per Unit—The add-on is sold to customers at a recurring price per custom-defined unit (for example, megabytes or users) and customers specify how many units they wish to purchase. For example, a customer who selects an extra storage add-on may choose a quantity of 5 megabytes at a price of $5.00 per megabyte per month.
   • Price and Usage Ranges/Restrictions—Instead of the simple Price Per Unit configuration, customers buy the add-on at a price that differs depending on the quantity they purchase. These prices are configured with quantity ranges. For example, $1.00 per megabyte per month when a quantity within the range of 5 to 100 megabytes is purchased, and $0.50 per megabyte per month when more than 100 megabytes are purchased. You can configure an unlimited number of these ranges. Note that with this example, the minimum value in the first range limits customers to purchases of 5 megabytes or more.
     Complete one of the next three steps, depending on your choice.

6. (Optional) Configure flat rate price:

   1. If the Flat Rate Price section is not visible, click Add a Flat Rate Price. The section appears.
   2. Enter the flat Price per billingFrequency.
   3. If the Marketplace Manager has configured more than one currency, there is a box for each currency. Enter the amount in each box, based on applicable conversion rates.
   4. Proceed to Step 13.

7. (Optional) Configure price per unit:

   1. If the Price per Unit section is not open, click Add Price per Unit. The Price Per Unit area appears.
   2. Define the unit type. The default is set as Users, but you can change this to meet your needs. Many unit types are preconfigured, including megabytes, gigabytes, contracts, boxes, data points, and others. To search for the unit type you need, start typing the unit type name in the per field, and options autopopulate.
      Note: The unit type you select here is the unit used for the remaining configuration in the Price Per Unit section.
   3. Enter the recurring per-unit price to charge per configured unit type.
   4. If the Marketplace Manager has configured more than one currency, there is a box for each currency. Enter the amount in each box, based on applicable conversion rates.
   5. Proceed to Step 11.

8. (Optional) Configure price and usage ranges:

   1. If the Price per Unit section is not open, click Add Price per Unit. The Price Per Unit area appears.

   2. Define the unit type. The default is set as Users, but you can change this to meet your needs. Many unit types are preconfigured, including megabytes, gigabytes, contracts, boxes, data points, and others. To search for the unit type you need, start typing the unit type name in the per field, and options autopopulate.

   📝 Note The unit type you select here is the unit used for the remaining configuration in the Price Per Unit section.

   3. To configure the price per unit for the range, in the box that appears below the currency type, enter the amount per unit for this quantity range (you define the Min and Max of this range in the next step).
   4. If the Marketplace Manager has configured more than one currency, there is a box for each currency. Enter the amount in each box, based on applicable conversion rates.

   

   5. (Optional) To define the minimum and maximum number of units for this range, in the Min and Max fields, define the quantity range to which this per unit price (configured in the previous step) applies.

      • For example, 1-100. This means that the user pays the price indicated in the currency type box above for each of the first 100 megabytes. If the minimum number of megabytes that can be purchased is 5 and this rate is applicable to a maximum of 100 users, the first range is entered as 5-100.
      • One or more ranges can be configured.

      

   6. (Optional) To add another range, click Add another usage range and repeat the previous two steps.

9. (Optional) Configure these optional settings:

   • Restrict purchases to increments of—To enable, enter a value other than 1. You can also accept the default of 1.
     When enabled, users must buy the product in the configured increment. The input field for customers is converted to a drop-down list. For example, the customer might see a drop-down list of 5, 10, 15, and 20 units.
   • **Display price per increment—**To enable, select the checkbox and set the minimum quantity to purchase to match the increment. Or, leave the checkbox cleared (the default state) to leave it disabled.
     When enabled, this changes the display on the product Pricing & Editions page to reflect the cost based on the minimum number of required units, instead of the price per individual unit. For example, if you set a minimum of 5, and an increment of 5, at $1 per user per month, the customer sees a price of $5 per 5 users instead of the normal $1 per user per month.

10. (Optional) If you configure two or more usage ranges, an additional field appears: Keep pricing tier with volume. Select it to enable the option. You can also accept the default which leaves it disabled.
    In this case, tier refers to a usage price range.
    To understand this option, consider this example: Price ranges are configured as follows: For the first 1-10,000 API calls, the price is set at $0 per call, and every call above 10,000 is charged at 10 cents.

• Checkbox selected—For the first 10,000 API calls, the user is charged $0. However, after the 10,000 call threshold is passed, the user is charged $.10 for every call reported during the billing period, including the first 10,000. So for 10,001 calls, the user is charged $10,001 X $0.10, for a total charge of $1000.10.
• Checkbox cleared—There is no charge for the first 10,000 API calls. For each API call above the 10,000 threshold, those additional calls are charged at $.10 per call. Therefore, for 10,001 calls, the user is charged $.10.

11. (Optional) Configure the Price Per Unit settings.
12. To enable metered usage for this unit type, turn on Metered usage. For example, $5/user based on usage.
13. To enable a setup fee per unitType, turn this option on. An additional fee per unit is applied to each unit purchased during the first checkout. For example, a $50 setup fee for each unit.
14. (Optional) Configure another usage rate:
15. Click Include another usage rate. A new Price Per Unit section appears.
16. Repeat step 8 to configure the new usage rate.
17. (Optional) Click Add a Setup Fee to activate this optional feature. The Setup Fee section appears. Enter a value. If the Marketplace Manager has configured more than one currency, there is a box for each currency. Enter the amount in each box, based on applicable conversion rates.
    This fee is only due at the first checkout and is not billed again. Purchases of additional quantities do not incur this fee. If customers cancel and repurchase the add-on, they are charged the setup fee again.
18. (Optional) To enable this optional feature, click Add Contract Terms to display the contract fields. For more information on contracts, see Contracts.
19. (Optional) Configure usage settings that are displayed at the bottom of the Recurring Price area. These include:

• Allow custom metered usage—When enabled, the developer can charge the user for custom metered usage
• Separate pre-paid order—If metered (postpaid) usage is enabled, this option is available. Enable this to split metered usage billing from prepaid billing. When enabled, separate orders are created for metered and prepaid billing, as are separate invoices: one invoice is generated for pre-paid charges at the beginning of the billing period and another is generated for the metered usage immediately after the billing period ends.
  By default, this option is disabled and all items on an order (pre-paid and post-paid) appear on one invoice which is generated at the end of a billing period.
• Keep billing cycle on usage change—When enabled, the order is put on the same billing cycle. Upon activation, the user pays the prorated amount for the remaining time in the current billing cycle and then pays the full amount at the start of the next billing cycle. For example, if a customer already purchased 5 users at $1/ month and upgrades half-way through the month to 15 users, they owe $5 at the time of upgrade (half of the 10 users) and pay $15 at the start of the next billing cycle.

16. (Optional) To create another pricing tier, click Add another price. A new Tiered Price pane appears. Repeat step 3 to define the new pricing tier.
17. Click Save Plan to save this configuration. A message confirms that the configuration is saved.
18. Complete the procedure described in Edit included items.