Options
Welcome to the "Options" section. Options are key to defining products and services for plans. They are essential for creating the pricing models you want to offer. Let's take a closer look at the available option types, pricing models and the difference between ad-hoc rating and usage pooling.
Available option types
In the Nitrobox system you use options to specify how products or services will be billed. There are three types of options: one-time, recurring or usage-based. Each option type has its own characteristics that define the billing process. Learn more about the different option types and their functions:
One-time options
A one-time option is a product, service, or fee that is billed only once in a given plan. For example, this may be a setup fee or a registration fee. This option type is usually billed at the beginning of a contract.
Recurring options
A recurring option is a product, service, or fee that is billed each billing interval of the assigned plan. For example, this can be a monthly or annual subscription fee. The billing interval can be configured directly in the plan.
Usage-based options
A usage-based option is a product, service or fee that is billed whenever the customer makes a usage-based purchase. Usage can be charging for a car, parking, or mobile data usage. There are three different types of usage-based options: contingent, tier option and volume option. These option types form the basis for individual and flexible pricing models.
Pricing models
Get to know the three usage-based pricing models.
Contingent pricing
The "contingent option" can be considered a stair-based pricing model that allows setting fixed prices for different stair steps.
Example contingent based pricing model
Parking case
Contingent tiers Price per contingent First 60 min 20 EUR Each additionally started 60 min 15 EUR The costs for 130 min (2:10h) would be 50 EUR
Calculation formula:
1 x 20 EUR + 2 x 15 EUR = 50 EUR
Tier-based pricing
For the "tier based option" you set unit prices per tier. These tiers serve as the billing basis and have to be fulfilled in the specified order.
Example tier based pricing model
Electric charging case
Tiers in KWh Price per KWh 0 - 100 0.20 EUR 101 - n 0.10 EUR The charging costs for 200 kWh would be 30 EUR
Calculation formula:
100 kWh x 0.20 EUR + 100 kWh x 0.10 EUR = 30 EUR
Volume-based pricing
The "volume-based option" allows to set different unit prices per level, using only the level of consumption to calculate the final price.
Example volume based pricing model
Tiers in pcs Price per pcs Up to 100 2 EUR More than 100 1 EUR The costs for 50 pcs would be 100 EUR
Calculation formula:
50 x 2 EUR = 100 EURThe costs for 300 pcs would be 300 EUR
Calculation formula:
300 x 1 EUR = 300 EUR
Ad-hoc rating vs. usage pooling
If you create a usage-based option, you have to decide whether the usages will be rated individually or cumulated. You make this decision via the "Usage pooling" switch. Learn more about this in the following section.
Depending on whether or not you enable "usage pooling" in your option, the price may vary significantly when you bill the contract.
If usage pooling is activated, all usages of a contract are cumulated up to the specified billing date and the usage total will be billed.
Ad-hoc rating
If usage pooling is disabled, it means that ad hoc rating is activated. Usages are immediately converted into billable items at the end of the respective use. This means an immediate rating takes place, therefore "ad-hoc" rating.
Based on the prices defined in the option, the usages become priced billable items. Depending on how the contract is configured, the billable items are then processed into invoices.
Usage pooling
If usage pooling is activated, all usages are collected until the contract is billed next time, e.g. end of month. The usage total will be cumulatively calculated and become one billable item.
This has a major impact on pricing, especially for tier-based and volume-based options, as the following example shows:
Example with usage pooling activated
The option includes a tier-based price plan.
Tiers in KWh Price per KWh 0 - 10 1.00 EUR 11 - n 0.50 EUR The charging costs for three separate charging events (1x 10 KWh, 1x 20 KWh, 1x 30 KWh) with activated usage pooling would be 35 EUR
Rating formula:
10 KWh + 20 KWh + 30 KWh = 60 KWhCalculation formula:
10 KWh x 1.00 EUR + 50 KWh x 0.50 EUR = 35 EUROne billable item of 35 EUR will be created.
versus
Example with ad-hoc rating activated
The option includes a tier-based price plan.
Tiers in KWh Price per KWh 0 - 10 1.00 EUR 11 - n 0.50 EUR The charging costs for three separate charging events (1x 10 KWh, 1x 20 KWh, 1x 30 KWh) with deactivated usage pooling would be 45 EUR
Calculation formula:
10 KWh x 1.00 EUR = 10 EUR
10 KWh x 1.00 EUR + 10 KWh x 0.50 EUR = 15 EUR
10 KWh x 1.00 EUR + 20 KWh x 0.50 EUR = 20 EURThree billable items of 10 EUR, 15 EUR and 20 EUR will be created. This results in a total price of 45 EUR.
The price difference between usage pooling and ad-hoc rating is 10 EUR. This shows that the price can significantly differ when you bill contracts with usage pooling or ad-hoc rating.
Create options and manage prices
A step-by-step guide on how to create options is available for you. Additionally, you can learn there how to manage option prices, handle multi-price management and schedule price changes in advance.
Updated over 1 year ago