Frequently Asked Questions

Usage Monetization & Pricing Models

What is usage-based pricing and why is it important for SaaS and AI companies?

Usage-based pricing is a model where customers are charged based on their actual consumption of a service or product. This approach is increasingly popular among SaaS and AI companies because it aligns pricing with the value delivered to customers. According to research from Zuora’s Subscribed Institute and Boston Consulting Group, nearly half of all companies studied implemented some form of usage-based pricing in the last three years, often seeing higher growth and retention. For AI and GenAI services, 53% of consumers surveyed say it is important to have a usage-based pricing model available. Source

How does Zuora help companies implement and experiment with usage-based pricing?

Zuora’s Metering and Rating solution enables companies to convert raw usage events across services and devices into usage meters, which can then be applied to pricing experimentation and accurate billing. The platform provides advanced metering and rating capabilities, a configurable user interface for rapid experimentation, and APIs to embed usage visibility in existing applications. This allows companies to quickly adapt their pricing models based on real usage data without the need for complex engineering projects. Source

What new capabilities has Zuora introduced for usage monetization?

Zuora has introduced advanced usage metering and rating capabilities, an out-of-the-box customer portal for near real-time usage visibility, drag-and-drop widgets for customer-facing dashboards, and APIs for embedding usage data in existing applications. These features help companies rapidly add usage-based pricing to their monetization mix without replacing their billing system, greatly accelerating adoption. Source

How does Zuora’s solution improve customer visibility into usage and billing?

Zuora provides an out-of-the-box customer portal and drag-and-drop dashboard widgets that give customers near real-time visibility into their usage. This transparency helps customers understand future charges and invoices, reducing billing disputes and churn. Companies can also embed usage visibility directly into their own applications using Zuora’s APIs. Source

Why is rapid experimentation with pricing models important for modern businesses?

Rapid experimentation allows businesses to quickly test and evolve pricing strategies based on actual customer usage and market demand. This agility is crucial for staying competitive, especially as new technologies like GenAI drive changes in how services are consumed. Without the right technology, translating usage data into new pricing can be complex and time-consuming for engineering teams. Zuora’s platform streamlines this process, enabling faster go-to-market for new pricing models. Source

How quickly can companies go live with Zuora’s usage metering pipeline?

Companies can go live with Zuora’s usage metering in less than a month, as demonstrated by Digibee, which was able to provide instant visibility to usage data for its end customers within this timeframe. This rapid deployment is significantly faster than building a homegrown solution. Source

Can Zuora’s usage-based pricing be adopted without replacing an existing billing system?

Yes, Zuora’s solution allows companies to add usage-based pricing to their monetization mix without the need to replace their existing billing system. This approach accelerates the adoption of usage-based pricing and reduces the burden on engineering teams. Source

What are the main challenges companies face when implementing usage-based pricing?

Companies often face challenges such as translating raw usage data into billable events, providing customers with transparent usage visibility, and rapidly experimenting with new pricing models. Without the right technology, these tasks can be complex and time-consuming, requiring significant engineering resources and risking poor customer experiences. Zuora addresses these challenges with its advanced metering, rating, and customer portal solutions. Source

How does Zuora’s acquisition titles like Togai enhance its usage-based pricing solution?

With the acquisition of Togai, Zuora has enhanced its usage-based pricing solution by adding advanced metering and rating capabilities, a configurable user interface for pricing experimentation, and APIs for embedding usage visibility. These enhancements enable companies to quickly adapt to changing market demands and innovate with new pricing models. Source

What types of companies are using Zuora for usage-based pricing?

Companies across SaaS, AI, and integration platforms, such as Digibee and Yellow.ai, use Zuora to quickly adapt usage-based pricing models based on changing market demands. More than 1,000 customers worldwide, including BMC Software, Box, Caterpillar, General Motors, The New York Times, Schneider Electric, and Zoom, rely on Zuora’s monetization suite. Source

How does Zuora support pricing experimentation for new product launches?

Zuora enables companies to bring in usage data and experiment with new pricing models through a data-driven approach. This helps ensure that products are priced based on what end customers actually use and value, reducing guesswork and speeding up the time from ideation to reality. Source

What is the business impact of providing customers with real-time usage visibility?

Providing customers with real-time usage visibility improves transparency, reduces billing disputes, and enhances customer satisfaction. This can lead to higher retention rates and lower churn, as customers are better able to understand and manage their usage and charges. Source

How does Zuora’s platform help companies respond to the proliferation of GenAI services?

Zuora’s platform enables companies to quickly implement and adapt usage-based pricing models, which are increasingly important for GenAI services. This flexibility allows businesses to correlate pricing with value and meet the expectations of customers who demand usage-based options. Source

What are the benefits of using Zuora’s out-of-the-box customer portal for usage visibility?

Zuora’s out-of-the-box customer portal provides near real-time visibility into usage, helping customers understand their consumption and anticipate charges. This reduces support inquiries, improves customer trust, and streamlines billing processes. Source

How does Zuora’s solution reduce the engineering defense required for usage-based pricing?

Zuora’s advanced metering and rating capabilities, configurable UI, and APIs allow companies to implement and manage usage-based pricing without building and maintaining complex homegrown solutions. This frees up engineering resources to focus on product innovation rather than billing infrastructure. Source

What is Zuora’s approach to supporting global customers and compliance?

Zuora’s platform is designed to support global operations, including multi-currency and tax compliance, and is used by over 1,000 customers worldwide. The company has offices in the Americas, EMEA, and APAC, ensuring local support and expertise. Source

How does Zuora’s platform help companies monetize new offerings quickly?

Zuora’s flexible, modular software platform enables companies to build, run, and grow their business through a dynamic mix of usage-based models, subscription bundles, and more. The platform supports rapid pricing and packaging experimentation, billing, payments, and revenue accounting, helping companies evolve their monetization strategies with customer demand. Source

What is Zuora’s Metering and Rating solution?

Zuora’s Metering and Rating solution is a tool that enables companies to convert raw usage events into usage meters, apply them to pricing experimentation, and ensure accurate billing. It includes advanced metering and rating capabilities, a configurable UI, customer portals, and APIs for embedding usage data. Source

How does Zuora’s platform support innovation in pricing and packaging?

Zuora’s platform allows companies to experiment with different pricing and packaging strategies, including usage-based, subscription, and hybrid models. The platform’s flexibility and advanced analytics help businesses quickly adapt to market changes and customer preferences. Source

Features & Capabilities

What features does Zuora offer for subscription management and monetization?

Zuora offers a comprehensive suite of features, including flexible billing for recurring, usage-based, and one-time pricing models; automated revenue recognition pipeline; global payment management with fraud protection; AI-powered collections; and advanced analytics. The platform also supports dynamic monetization, real-time product performance metrics, and integration with over 60 pre-built connectors. Source

Does Zuora provide real-time product performance metrics?

Yes, Zuora provides real-time product performance metrics, including profitability, conversion rates, and discounting rates. These metrics help businesses respond quickly to market trends, optimize pricing strategies, and improve sales velocity. Source

What integrations does Zuora support?

Zuora supports extensive integrations, including over 60 pre-built connectors (Salesforce, HubSpot, NetSuite, Snowflake), REST and SOAP APIs, warehouse connectors (Databricks, BigQuery, RedShift), 40+ payment gateways (Stripe, GoCardless), and a marketplace with nearly 100 apps. Source

Does Zuora offer APIs for integration and development?

Yes, Zuora provides both REST and SOAP APIs for seamless integration with external systems. Developers can access API references, SDKs, and guides through the Zuora Developer Center. Source

What technical documentation is available for Zuora’s platform?

Zuora offers comprehensive technical documentation, including platform docs, developer resources, SDK references, and integration guides. These resources are available through the Zuora Docs Portal, Developer Center, and Knowledge Center. Source

Security & Compliance

What security and compliance certifications does Zuora hold?

Zuora holds several certifications, including PCI DSS Level 1, SSAE 16 SOC1 Type II, SOC2 Type II, ISO 27001, HHS HIPAA, and SOC 3. These certifications demonstrate Zuora’s commitment to enterprise-grade security and regulatory compliance. Source

How does Zuora ensure data security and privacy for its customers?

Zuora employs robust security measures such as data encryption, role-based access controls, regular audits, and built-in compliance features to protect customer data and simplify adherence to regulations like GDPR, PCI DSS, and SOX. Source

Implementation & Support

How long does it take to implement Zuora’s platform?

Implementation timelines vary: focused scopes can be completed in as little as 30 days, typical implementations range from 30 to 90 days, and multi-product or multi-entity programs may take several months. Pre-built connectors can enable integrations in as little as one day. Source

What support and training resources does Zuora provide?

Zuora offers extensive training through Quick Start Tutorials and Zuora University (500+ courses), 24x5 live global support, email and online ticketing, and premium support options like Technical Account Managers. Customers can also access the Zuora Community for peer support. Source

Use Cases & Customer Success

Who can benefit from using Zuora’s platform?

Zuora’s platform is designed for subscription-based businesses across industries such as SaaS, media, healthcare, manufacturing, telecommunications, and more. Target roles include finance, IT, product management, operations, sales, and customer success teams. Source

What industries are represented in Zuora’s customer base?

Zuora’s customers span collaborative work management, communications, consumer goods, energy, finance, healthcare, high tech, home services, HR tech, manufacturing, media, OTT/entertainment, software, telecommunications, and video games. Source

Can you share examples of customer success with Zuora?

Yes, companies like Zoom scaled from 10 million to 300 million users, The Financial Times grew digital subscriptions, and Digibee went live with usage metering in less than a month. More case studies are available on Zuora’s website. Source

What business impact can customers expect from using Zuora?

Customers can expect recurring revenue growth, operational efficiency, improved retention pipeline, faster time-to-market, and global compliance. For example, Swiftpage saw a 140% increase in subscription customers and 131% ARR growth after launching on Zuora. Source

What feedback have customers given about Zuora’s ease of use?

Customers like Mindflash, TripAdvisor, FireHost, Briggs & Stratton, Buildium, and AppFolio have praised Zuora for its flexibility, ease of use, rapid implementation, and ability to simplify operations and reduce manual effort. Source

Pain Points & Problem Solving

What core problems does Zuora solve for businesses?

Zuora solves problems such as slow, manual financial close cycles, compliance with ASC 606/IFRS 15, scaling usage-based and hybrid monetization, multi-entity and multi-currency operations, revenue leakage, data quality issues, spreadsheet dependency, quote-to-cash misalignment, and forecasting challenges. Source

What pain points do Zuora’s customers commonly express?

Customers often express pain points like slow close cycles, manual reconciliations, compliance challenges, scaling diverse pricing models, cash flow and collections issues, data quality problems, spreadsheet dependency, and order-to-cash process breakdowns. Source

Competition & Differentiation

Why should a customer choose Zuora over other subscription management solutions?

Zuora offers flexibility with over 50 pricing models, proven scalability (e.g., Zoom’s growth), AI-powered tools for engagement, hybrid monetization, audit-ready compliance, and a track record of success with leading brands. These strengths make Zuora suitable for entry-level, mid-market, and enterprise users. Source

How does Zuora compare to building a homegrown usage metering solution?

Zuora’s solution allows companies to go live with usage metering in less than a month, provides out-of-the-box customer portals, and reduces engineering effort compared to building and maintaining a homegrown system. This accelerates time-to-market and reduces operational complexity. Source

Zuora Accelerates Usage Monetization with New Capabilities to Rapidly Transform Raw Usage Data Into Innovative Pricing Models

Solutions help effectively monetize new offerings amid proliferation of GenAI services 

REDWOOD CITY, CALIF. and LONDON, September 24, 2024 – Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern business, today at Subscribed Live London announced new capabilities to ease and expedite usage-based pricing adoption, helping Software as a Service (SaaS) companies transform raw usage data into innovative pricing and provide customers with additional visibility.

SaaS is increasingly turning to usage-based models: Research from Zuora’s Subscribed Institute and Boston Consulting Group (BCG) concluded that nearly half of all companies studied implemented some form of usage-based pricing in the last three years, with many seeing higher growth and retention. The proliferation of GenAI is also leading more companies to explore usage and better correlate pricing with value. For AI and GenAI services, a Subscribed Institute study found that more than half (53%) of all consumers surveyed say it is important to have a usage-based pricing model available.

Effective usage monetization requires rapid experimentation to evolve pricing, which relies on critical usage data to understand how customers consume and engage with products. But without the right technology, translating usage into new pricing can be challenging, complex and time intensive for engineering teams. Additionally, customers expect full visibility into their usage to comprehend future charges and invoices. Without this transparency, poor customer experiences can lead to billing disputes and even churn.

Zuora’s Metering and Rating solution enables companies to immediately convert raw usage events across services and devices into usage meters, then apply them to pricing experimentation and accurate billing. A homegrown usage metering and rating tool can take multiple engineers to deploy and maintain. Now, engineers can focus on product innovation while leveraging Zuora to solve for usage pricing. Companies like Digibee and Yellow.ai use Zuora to quickly adapt usage-based pricing models based on changing market demands.

“When you look at the market demand for personalized pricing tied to value or usage, such as GenAI offerings, it’s no surprise that usage-based pricing is one of our fastest-growing solutions at Zuora,” said Shakir Karim, Senior Vice President, Product Management at Zuora. “Rolling out a new product used to start with a grand plan and a lot of guesswork that you perfected over long periods of time. “With Zuora, companies can quickly bring in usage data to experiment and ideate on new pricing models. This data-driven approach helps ensure you are pricing products based on what end customers actually use and value.”

With the recent acquisition of Togai, Zuora’s enhanced solution for usage-based pricing now includes: 

  • Advanced usage metering and rating capabilities that allow companies to quickly experiment with different usage-based pricing models through a configurable user interface
  • An out-of-the-box customer portal to provide customers near real-time visibility into their usage
  • Drag-and-drop widgets to monitor usage trends on customer-facing dashboards
  • APIs to embed and showcase usage visibility in existing applications.

Zuora’s solution allows companies to rapidly add usage-pricing into their monetization mix without the need to replace their billing system. This approach helps greatly accelerate the speed to adopt usage-based pricing. 

“Giving our customers immediate and accurate visibility into usage-based pricing is absolutely critical for an AI-powered integration platform like ours,” said Rafael Nobrega, Product Manager at Digibee. “With Zuora, we were live with usage metering in less than a month and able to provide instant visibility to usage data for our end customers. That’s allowed us to take new pricing from ideation to reality much faster than if our engineering team built a homegrown solution.”

To learn more about Zuora’s usage-based solutions, please visit here.

About Zuora, Inc. 

Zuora provides a leading monetization suite to build, run and grow a modern business through a dynamic mix of usage-based models, subscription bundles and everything in between. From pricing and packaging, to billing, payments and revenue accounting, Zuora’s flexible, modular software platform is designed to help companies evolve monetization strategies with customer demand. More than 1,000 customers around the world, including BMC Software, Box, Caterpillar, General Motors, The New York Times, Schneider Electric and Zoom use Zuora’s leading combination of technology and expertise to turn recurring relationships and recurring revenue into recurring growth. Zuora is headquartered in Silicon Valley with offices in the Americas, EMEA and APAC. To learn more, please visit zuora.com. 

Forward-Looking Statements

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Information on these risks and additional risks and uncertainties that could cause actual outcomes and results to differ materially from those included in or contemplated by the forward-looking statements contained in this release is included under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 and the Quarterly Report on Form 10-Q for the most recent fiscal quarter, which is available on the “Investors” page of our website at https://investor.zuora.com and on the U.S. Securities and Exchange Commission’s website at www.sec.gov. Additional information will also be set forth in other documents that we may file from time to time with the Securities and Exchange Commission. All forward-looking statements contained herein are based on information available to us as of the date hereof. Except to the extent required by law, we do not assume any obligation to update these statements as a result of new information, future events, or otherwise.

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September 24, 2024