Credits and Entitlements - Why are they must-haves in your Usage billing software?

Credits and entitlements are two distinct concepts in billing strategies that can significantly impact customer adoption, usage rewards, and flexible pricing options. Credits serve as a form of currency incentive provided to customers by businesses, offering discounts or specific amounts for their loyalty or exploration of product capabilities. Entitlements, on the other hand, are like keys that unlock specific features or functionalities within a product, typically tied to pricing plans or prepaid commitments. Understanding the differences between credits and entitlements is crucial for effective management of billing and pricing strategies in usage-based billing tools. Credits can be applied as discounts, promotional offers, grants at various levels, or refunds during downtimes. Entitlements involve three steps: Togai (the billing software provider), the company, and their customer, allowing businesses to gate specific features or bundles with defined limits. By leveraging credits and entitlements strategically, companies can create flexible and customer-centric pricing models that align with their business goals. Experimentation, monitoring of customer behavior, and data-driven insights are essential for optimizing the use of these tools in billing strategies.