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Understanding CRM.COM billing models

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Overview

CRM.COM supports a variety of business models through two types of billing: 'Normal' and 'Prepaid'.

Subscriptions that follow the normal billing model are funded from an accounts receivable.  Services can be billed for an upcoming period (pre-billed) or after being used (post-billed).  Billing takes place during a normal billing run.  The run can be executed on a monthly basis (period billing - all subscribers are billed on the same day) or daily basis (anniversary billing - subscribers are billed on the day of the month on which they signed up).  A credit limit, set on the account associated with each subscription, controls the activation of services; if the limit is exceeded, then the system restricts the activation of services. 

Subscriptions that follow the prepaid billing model are funded directly from a wallet. Services can be billed for a predetermined upcoming period (pre-rated) or after being used (post-rated).  Depending on their type, services are billed when activated or during a prepaid billing run.  In order for a subscription to be successfully activated, there must be sufficient funds in the wallet of the subscriber to cover the period during which the services will be active.  Should the funds be insufficient when the billing run takes place, the services become candidates for deactivation.

The billing term scheme assigned on each subscription determines the billing behavior and the business rules that should be applied while billing subscribers (such as pricing, binding terms and billing frequencies). The billing frequency can be configured in CRM.COM, so that billing takes place at specified time intervals expressed in days, weeks, or years (for example, every 1 or 3 days, every week or month, every 3 months).

Multiple billing term schemes can be defined in CRM.COM for use in B2C and B2B billing.

Refer to Subscription Prepaid Billing and Subscription Normal Billing for additional information on each model. 

CRM.COM billing models and life cycle 

Normal billing

CRM.COM supports the following normal billing models (funded from an accounts receivable):

  • Pre-billed - Pay before bill: Services are pre-billed following sign-up anniversary or period cycles, and a bill is generated if the rated amount was paid in advance.
  • Pre-billed - Pay after bill: Services are pre-billed following sign-up anniversary or period cycles, and a bill is generated for payment.
  • Post-billed - Pay after bill: Services are post-billed and a bill is generated for payment.

Prepaid billing

CRM.COM supports the following prepaid billing models (funded from a wallet):

  • Prepaid - Subscription driven: The subscriber selects the period to be pre-rated for all services included in the subscription.  Funds are deposited in the wallet and the system allocates the payment using FIFO (first-in, first-out), based on consumption.
  • Prepaid - Payment driven: The subscriber does not select the period to be pre-rated for all services included in the subscription.  Funds are deposited in the wallet and the subscriber designates the services on which they should be spent.  The system keeps providing the services as long as they are funded.

Billing life cycle

  • Subscriptions are billed through the normal or prepaid billing process.
  • The billing process determines the period and the price used to bill subscriptions and their services.
  • If funds are insufficient to cover the cost of the period, the billing process classifies the subscription services as candidates for deactivation and puts them in the deactivation queue.
  • Automatic deactivation is a stand-alone business process that handles subscription services that are classified as candidates for deactivation, as well as subscriptions that are owned by accounts with an overdue balance.  The process uses criteria specified by the business to evaluate which of the services in the deactivation queue should be deactivated.  The process is applied on a recurring basis and on individual services or entire subscriptions.
  • Automatic activation is a stand-alone business process that handles subscription services that are not effective.  The process uses criteria specified by the business to evaluate which of the services to activate.  The process also handles effective subscription services that are classified as candidates for deactivation, by identifying them in the deactivation queue and billing them.  Automatic activation can be applied when a payment is submitted or on a recurring basis.  The process can be applied to individual services or to an entire subscription.
  • Automatic cancellation is a process that cancels subscription services that are not effective over a certain period (specified by the business).  The process is applied on a recurring basis and on individual services or entire subscriptions.

Major Billing and Subscription Processes

Automatic renewal of subscription services

In the automatic service renewal model, the services to which a customer subscribes remain active as long as they are funded.  By default, termed subscription services are automatically renewed. The following rules apply:

  • For normal subscriptions:
    • Pre-billed - Pay before bill: Termed services are renewed if there are sufficient funds in the accounts receivable for an additional billing period, as specified by the subscriber in the billing terms, or if an automatic payment is effected through a payment gateway (pre-payment).
    • Pre-billed - Pay after bill: Termed services are renewed if the accounts receivable credit limit is not exceeded after billing the services for an additional billing period, as specified by the subscriber in the billing terms.
    • Post-billed - Pay after bill: Termed services are renewed as long as the accounts receivable has not reached its credit limit.
  • For prepaid subscriptions:
    • Prepaid - Subscription driven: Termed services are renewed if there are sufficient funds in the wallet for an additional billing period, as specified by the subscriber in the billing terms.
    • Prepaid - Payment driven: Termed services are renewed if there are sufficient funds in the wallet for an additional billing period, determined by the system depending on the maximum billing period.
    • If the funds are sufficient to only renew a number of services, the system selects which services to renew based on the priority rules defined by the business. 

Pay now and activate services later

Subscribers can pay for services and activate them on demand in the future, by purchasing an electronic voucher for a specific service.

Automatic recurring payments

Customers can opt-in to automatic payments to top up their wallets and pay unsettled bills, by drawing funds from a payment gateway. This process is applied on a recurring basis at predetermined intervals, or once a day at a specific time when the wallet balance drops below a certain threshold.

Automatically activating subscriptions

Automatic activation is a stand-alone business process that handles subscription services that are not effective.  The process uses criteria specified by the business to evaluate which of the services to activate.   Automatic activation can be applied when a payment is submitted or on a recurring basis.  The process can be applied to individual services or to an entire subscription.

Automatically deactivating subscriptions

Automatic deactivation is a stand-alone business process that handles subscription services that are classified as candidates for deactivation, as well as subscriptions that are owned by accounts with an overdue balance.  The process uses criteria specified by the business to evaluate which of the services in the deactivation queue should be deactivated.  The process is applied on a recurring basis and on individual services or entire subscriptions.  Automatic deactivation takes into consideration the date and time of activation, so as not to interrupt subscriber services prematurely.

Automatically canceling subscriptions

Automatic cancellation is a process that cancels subscription services that are not effective over a certain period (specified by the business).  The process is applied on a recurring basis and on individual services or entire subscriptions.

Notifying customers

CRM.COM provides a set of notification processes used to inform customers regarding accounts or subscriptions in a specific state.  Customers can be notified regarding:

  • Unsettled bills before subscriptions are deactivated
  • Deactivated subscriptions
  • Re-activated subscriptions after bills are settled
  • Wallets running out of funds.


Business Examples

Find below multiple business flows associated with billing, payments, and activation and deactivation of normal and prepaid subscription services.

Billing life cycle 

  • A customer registers for prepaid, post-rated services:

    • The billing process bills the services consumed during the period and if the wallet runs out of funds, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation.
    • If the customer submits a payment that can fund the services, then the services are automatically activated.

  • A customer registers for prepaid, pre-rated services with a predetermined pre-rated period:

    • The customer tops up the wallet.
    • The services are activated, provided there are sufficient funds in the wallet to cover the services for the predetermined period.
    • The billing process bills the services, provided there are sufficient funds in the wallet to cover the services for the period; otherwise, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation.
    • If the customer submits a payment that can fund the services, then the services are automatically activated.

  • A customer registers for prepaid, pre-rated services with no predetermined pre-rated period:

    • The customer top ups the wallet.
    • The services are activated, provided there are sufficient funds in the wallet to cover the services for the minimum pre-rated period allowed by the business.
    • The billing process bills the services for the maximum period that can be funded, aiming to bill as many services as possible; otherwise, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation.
    • If a payment that can fund the services for the minimum pre-rated period allowed by the business is submitted, the services are automatically activated.

  • A customer registers for normal, post-billed services:

    • The billing process bills the services that were consumed during the period.  If the customer's account exceeds its credit limit, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation.
    • The services are activated if a payment is effected that brings the customer's credit limit or overdue balance above the allowed threshold.

  • A customer registers for normal, pre-billed, pay after bill services:

    • The billing process bills the services as long as the account's credit limit is not exceeded; otherwise, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation or any services that are owned by accounts with an overdue balance.
    • The services are activated if a payment is effected that brings the customer's credit limit or overdue balance above the allowed threshold.

  • A customer registers for normal, pre-billed, pay before bill services:

    • The services are activated provided there are sufficient funds for the services in the account for the predetermined period.

    • The billing process bills the services, provided there are sufficient funds to cover the services for the period; otherwise, the services are classified as candidates for deactivation.
    • If a payment is submitted, the services are re-evaluated and either remain classified as candidates for deactivation or become unclassified.
    • The deactivation process deactivates services that are candidates for deactivation or any services that are owned by accounts with an overdue balance.
    • The services are automatically activated if the customers submits a payment that can fund the services for the predetermined period.

Automatic recurring payments

  • A customer registers for normal subscription services.

  • The customer opts in for automatic recurring payments through a payment gateway.

  • The billing process generates a bill.

  • Funds are automatically drawn from the payment gateway and settle the bill.

  • A customer registers for prepaid subscription services.

  • The customer opts in for automatic recurring payments through a payment gateway.

  • Company policy requires that wallets should be automatically credited with €30 when their balance drops below €5.

  • The customer consumes wallet funds.

  • When the wallet balance drops below €5, €30 is withdrawn through the payment gateway to top up the wallet.

  • A customer registers for prepaid subscription services.

  • The customer opts in for automatic recurring payments through a payment gateway, specifying the associated wallet should be automatically credited with €40 if the wallet balance drops below €10.

  • The customer consumes wallet funds.

  • When the wallet balance drops below €10, €40 is withdrawn through the payment gateway to top up the wallet.

  • A customer registers for prepaid subscription services

  • The customer opts in for automatic recurring payments through a payment gateway, specifying the associated wallet should be automatically credited with €40 if the wallet balance drops below €10, and that the amount can only be spent on a specific sports product.

  • The customer consumes wallet funds.

  • When the wallet balance drops below €10, €40 is withdrawn through the payment gateway to top up the wallet.

  • The €40 can only be spent on the specific sports product.

 

 

Paying for specific services

 

 

  • A new customer registers for prepaid services:
    • The customer makes a payment with the intention to consume the amount on specific services.
    • The customer registers for the specific services that will consume the amount.

  • An existing customer makes a payment for specific services:

    • The customer makes a payment with the intention to consume the amount on specific services.
    • The amount is consumed only by the specified services.

  • An existing customer makes a payment:  

    • The customer makes a payment without the intention to consume the amount on specific services.
    • The amount is consumed by any service the customer has registered for.


Recommended Reading

Refer to the CRM.COM manual getting started and best practice solution guides for further information:



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