Business and Industry Perspective

Are You Leaving Revenue on the Table?

February 8, 2017

Recurring revenue – it’s a beautiful thing…

…but it can be a total nightmare if you don’t have a strong billing system in place to handle its inherent complexity.  As adoption of highly customized recurring revenue models rapidly expands, more and more businesses are entering the subscription economy and looking for ways to adapt their back-office operations to keep up.

According to TUFF, revenue leakage is a real problem causing millions to be left on the table. They found that the communications industry suffered estimated losses of about $953 million (based on an average loss of 2.4% against total reported revenue). For many businesses, revenue leakage is a multi-faceted issue that can be difficult to spot and address. Leakage usually begins with small customer accounts that don’t seem like major problems but, overtime, can add up to a major loss in profit.

Facing these issues head-on can improve revenue assurance and give your organization the ability to scale. So, how can you eliminate revenue leakage while driving your business’ bottom line? Here are the top five ways to make it happen:

1) Track Different Usage

The ability to track and bill for different usage is key for those in the subscription space. For the modern consumer, pay-as-you-go pricing is not just desired , it’s expected. If your backoffice is lacking the ability to track different usage and execute metered billing, you’re missing out on revenue. Leveraging metered billing will help ensure that you’re charging for various usage and never leaving potential revenue on the table.

2) Deploy Auto Expirations for Discounts

Most service businesses offer discounts to customers who meet certain service level criteria. While this can increase sales in the short-term, overlooking expiration dates on these discounts can quickly eliminate your margins. In fact, Aberdeen estimates that a lack of data visibility can result in 10% lower revenue because unearned discounts are granted. Ensuring your billing system can support and automatically deploy auto expirations is vital for your business’s growth. Deploying auto expirations can help you avoid unwanted leakage.

3) Explore Tiered Pricing Models

Offering your service at different price points can help subscription businesses increase potential revenue. But with the amount of research and analysis necessary to launch, the pursuit of tiered pricing models can quickly become extremely daunting and, in some cases, out of reach. By gaining access to comprehensive, easily accessible data, you can empower your organization to deploy pricing models that truly impact your bottom line.

4) Optimize Current Packages

In order to mitigate and correct revenue leakage, businesses must first identify their gaps and quickly establish an end-to-end approach to avoid future challenges. Easier said than done. Before pursuing new lines of revenue or revamping your entire pricing structure, optimize the packages you already offer. A strong A/B testing plan can dramatically increase your revenue and ultimately minimize revenue leakage. Traditional siloed data analysis won’t cut it. For true optimization, you’ll need to move away from manual billing processes and adopt sophisticated IoT and telecom billing solutions.

5) Embrace Redundancy, Layer Mobility

Recent studies show that between one to three percent of all revenues are unbilled and between two to six percent of billed revenues go unpaid. This unbilled usage is hurting your bottom line. For every minute that your cloud based billing system goes down, you’re missing out on revenue you could have been earning. Wondering where you can find such a reliable system? We have your back –’s platform has 99.99% uptime and built in redundancy so you never miss a beat and can monitor your customer’s usage with ease.

So, ask yourself – what’s holding my organization back from substantial growth? If the complexities of back office billing is the answer, know that is here to help. Contact us anytime with questions about revenue leakage analysis or comment:

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