Product Plans
Overview
Product plan represents pricing plans, packages, or SKUs that customers can enroll in and be billed on. Examples of product plan are free trial plan, startup plan, enterprise plan, etc. Product plan defines how bills will be calculated such as fixed amount or variable amount, the schedule of payments such as beginning of billing cycle or end of billing cycle, and adjustments to payment such as free trial period or free credits. All businesses are different, so are their pricing strategies. Product plan in Paigo is built with flexibility so that product plans can be customized and fit various business needs.
Product Plan Configuration
A product plan can be enrolled by multiple customers or single customer. These properties are configurable for a product plan.
Name: Each product plan has a name that will be used to display on invoice or show up in payment. The product plan name should be human-friendly and intuitive (thinking of
Growth Planrather thangrowth-plan-public)Type:
Usage-based: The amount customers are billed depends on the exact customer's usage. The billing occurs after the billing cycle concludes, such as the first day of the next month. When the product plan type is
Usage-based, the Usage Dimension property is required to have at least one dimension.Subscription-based: The amount customers are billed are determined upfront. Therefore, the billing occurs before the billing cycle starts, such as the first day of the month.
Fixed Fee: The amount customers are billed is the same for every billing cycle. The billing occurs at the beginning of the billing cycle, such as the first day of current month. When the product plan type is
Fixed Subscription, the Usage Dimension property is optional. If there are dimensions attached to product plan, then the charges for the usage occurs at the end of the billing cycles as invoices.
Subscription Price: Required for
Fixed Subscription. The fixed amount to be billed to customers every billing cycle.Free Trial: Whether to enable free trial on the pricing product plan. The configuration of free trials (free trial period, free trial credit, or free trial usage) is determined the other properties.
Free Trial Period (Days): The number of days for free trial period.
Billing Cycle: The time period for billing to be processed.
Calendar Month: Billing will be processed with billing cycle aligned with calendar month, such as beginning of the month or end of the month.
Usage Dimension: The product metrics tied to the pricing strategy, such as API call, compute capacity, or storage volume. Usage dimension can be one or more metrics combined as a business package. See Product Items on documentation to define dimensions.
Model Free Trial
Paigo offers three models of free trial: free trial period, free trial credit, and free trial usage.
Free trial period is defined in terms of days. During the period, all fees and charges are waived for the customers, such as bills based on usage or fixed subscription fees. Invoices are still generated for customers with line items shown, but the amount due during free trial periods is 0. If the free trial period spans more than one billing cycle, Paigo calculates the prorated amount due after deducting the charges from free trial periods. The customer's free trial period status is shown in Paigo dashboard with days remaining or expired dates in the past. The customer's free trial period can also be retried by API. See Get Customer API.
Free trial usage is defined at dimensions level. Customers can use up to a certain limit of product usage free of charge. A classic example of free trial usage is AWS Lambda function: the first 1M Lambda runs are free every month. Free trial usage is implemented in Paigo using dimension entitlement. To define free trial usage, follow the steps below:
Turn on the Usage Entitlement toggle of a dimension
Enter the free trial usage amount in the Entitlement Limit, such as 1,000,000 API requests.
Turn on Allow Overage toggle.
Enter the price in the Consumption Price
Specify other properties as appropriate. See Product Items .
Once dimensions are set up, the initial usage metered is free of charge for every billing cycle. Usage above the entitlement limit will be billed accordingly.
Free trial credit is coming soon.
Defining Product Plan Best Practices
Define B2B sales deals as separate product plans
Each B2B sales deals may contain different software packages, pricing structure, or payment schedule. The best approach to charge customers the right price is to define dedicated product plan for a particular customer, with the following benefits:
Customized identifier (product plan name) for a particular customer, therefore it's easier to manage
Allow different pricing structures such as different payment schedule or discount terms
Update to product plan won't affect other customers. The contract may be renewed or revised. Therefore, the product plan maybe updated. Create dedicated product plan for a customer will minimize the potential impact to other customers bill.
Leverage usage dimensions to fully customize product plans
Usage dimension is the key to the flexibility of product plans as usage dimension can be used to represent a product usage metric (such as consumed data), usage entitlement (such as limit 50GB storage), feature flag (such as Enterprise Support Plan, or SLA level 99.95%), or customer value metric (such as number of users). The beauty of product plan is that it allows combinations of usage dimensions of different kinds. For example, a usage-based product plan can consist of the following dimensions at the same time:
$0.0001 per 1,000 API call, as a product usage metric
$50 GB Data Storage Limit, as a usage entitlement
Developer Support Plan for $99/Month, as a feature flag
Different ways of usage dimension combinations can be used to test software packing, or tailored for different segment customers such as SMB, free trials, etc. See Product Items for more documentation and best practices on using dimensions.
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