This Billing Method Unlocked $1.5 Billion for MongoDB!
MongoDB did the traditional flat rate pricing years ago and found that their revenue didn't scale. They did a billing change that generated billions for them. What is that change? Read on...
MongoDB’s journey to a staggering $1.5 billion in revenue is a testament to billing innovation. Initially, their one-size-fits-all pricing model restricted their growth potential, failing to accommodate the diverse needs of their varied customer base, from individual developers to massive enterprises.
The game-changer for MongoDB was the adoption of Usage-Based Pricing (UBP). By revamping their billing structure to focus on customer usage and value, MongoDB shattered the myth that UBP is unsuitable for enterprise-level customers. This shift was not just about changing the billing model but aligning value with cost, a crucial aspect for enterprise customers who demand scalability and flexibility.
MongoDB's Atlas platform epitomizes this approach. Its billing is based on the selected cluster tier, ranging from M0 to M700, each tier designed for specific needs and performance levels. This granular approach allowed MongoDB to cater to a broad spectrum of users. The M0 clusters offer a free entry point, ideal for beginners or small-scale applications, while higher tiers like M30 cater to heavy loads and large datasets, providing full Atlas functionality.
This customer-centric approach powered growth by:
1. Flexible Value Mapping
Precise usage tracking enabled right-sized pricing tiers to capture value across the spectrum - affordable developer onboarding, and profitable large customer workloads.
2. Expansion from Metric Visibility
Granular consumption data identifies growing usage trends guiding targeted upsells and pricing optimizations leveraging willingness to pay.
A key factor powering this flywheel effect is MongoDB's incredibly high customer retention - almost 75% of enterprise accounts exceed 4+ years of tenure. Top customers have remained for over 5+ years, steadily expanding usage and spending within MongoDB's consumption-aligned pricing spectrum.
MongoDB, as a NoSQL database, is particularly well-suited for data-intensive applications.
The more data a customer stores and processes, the more they utilize MongoDB's capabilities, directly correlating to the value they receive. This pricing model effectively turns MongoDB's data handling prowess into a revenue-generating feature, ensuring that as customers' data needs grow, so does MongoDB’s revenue.
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In FY22, they recorded a 4.5x expansion YoY to $873M ARR and a 466% increase in just four years. The year 2023 continues to see 29% growth on a $1.5B base, marking a 37% year-over-year increase.
The most recent quarter of Q2 FY23 saw MongoDB's quarterly revenue hit $424 million, a 40% increase from the previous year, underscoring the sustained momentum from their customer-centric pricing strategy.
MongoDB basin broke their monetization potential wide open - easy onboarding to penetrate segments while maximizing revenue as accounts use more over time. Their billing infrastructure, capable of precisely tracking usage metrics across their product suite, facilitates continuous optimization of their pricing model.
MongoDB's ability to offer flexible pricing without cumbersome migrations has created a flywheel effect, attracting new users and seamlessly transitioning them to higher-value contracts.
Importantly, MongoDB’s UBP approach has not only scaled revenues but also enabled deeper penetration into diverse market segments, including large enterprises such as NASA, T-Mobile, and Daimler.
Your billing platform should be flexible enough to provide these essential building blocks for the next wave of usage and outcome-based monetization - flexible rating configurations, granular tracking of business metric consumption, automated billing workflows, and analytics mapping spending to value.
By making its billing platform reflect usage value, MongoDB was able to architect a billion-dollar revenue engine powering its category leadership. And behind their massive success was the backbone and a silent spectator - their billing stack!
📖 Put your reading glasses on 👓
What is feature gating? How is it a key revenue driver in 2024? You don’t need new pricing tiers, a completely new packaging or sales strategy to generate new revenue. Explore the realm of feature gating, where you can monetize your existing features and generate new monetization opportunities.
What’s brewing with the product? 🍺
📜 Custom invoicing: Are you looking to set up your brand’s invoice template? Play around with Togai’s invoice editor and change the look and feel of your invoice using a friendly “what you see is what you get”. If you already have custom templates, simply upload them and create invoices of similar look and feel on Togai. We also provide support for downloading the invoices from UI or API.
🔌 New and exciting integrations: We have now increased our integration spread and expanded our offerings by integrating with Salesforce, Tally solutions. Now our quickbooks integration also supports updating Togai invoice line items directly to Quickbooks chart of accounts. Did we also mention this earlier? We also do custom integrations with the solutions you already have, be it on-premise or other tools!!
🧾 Create ad-hoc invoices: Say bye to creating manual invoices for every additional service you provide. With Togai, you can now create ad-hoc invoices for one-time purchases, services and paid support you offer your customers.
💸 Togai provides the billing cycle modeling flexibility: Let me explain this with an example. For instance, you may want to bill some larger accounts on a quarterly schedule starting from when they initially signed on. Others may prefer simple monthly subscriptions that charge on the 1st of each month. With customizable anniversary cycles, you can set billing to align precisely with the onboarding date for each client. Whether you offer weekly, monthly, quarterly, semi-annual or annual billing, our system supports associating unique price plans and schedules to each customer as desired.
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