You’ve just added a cloud service for your 500 headcount contact center, entering into a per-seat agreement with the vendor. While the seat-based model may appear to offer a flat recurring expense, it’s costing your organisation more than you realise. In contrast, consumption-based billing models present a shift that may seem to have uncertain costs or surprise with unforeseen usage demands.
I often hear and understand these concerns from the many customers I speak with, but as a contact centre analyst once described to me: “I’ve never found someone who didn’t save money in consumption-based billing.”
Let’s break down why this claim holds true by busting the myths often heard about seat-based billing models.
Myth #1: Seat-based billing offers me unlimited usage.
A perceived advantage in per-seat models is that each seat can offer unlimited usage. During peak overtime periods, it might seem like you are gaining additional value per seat given the higher utilisation.
However, with claims of unlimited usage, it is critical to review the fine-print of the agreements which may reveal additional fees based on use, or new fees when surpassing certain usage thresholds. In these instances, per-seat billing can surprise organisations with higher costs from peak usage moments.
The truth is: per-seat models are designed to make money for the vendor, not save you money. They incentivise over-provisioning of licenses to avoid overage fees. With consumption billing, you pay only for what you use, allowing elastic scaling based on demand without penalties.
Myth #2: Seat-based billing allows me to remain dynamic to peak and lull periods.
It’s true that contact volumes can fluctuate dramatically by season, promotions, or other factors. Conventional wisdom suggests per-seat licensing provides flexibility to simply staff up or down as needed. However, this assumption overlooks the costs often associated with adding or removing seats. Moreover, seat licenses typically have duration limits (for example, monthly, quarterly, or hourly), and most per-seat contracts require minimum commitments for a set number of seats.
This model can lead to inefficiencies: if volumes drop, you’re still paying for unused seats. Conversely, if you need to temporarily scale up for a campaign, vendors often sell overage licenses at premium rates.
On the other hand, consumption billing offers true dynamism. Costs automatically flex in lockstep with demand, without expensive overages or minimums holding you back. Should unforeseen usage demands increase due to events—like a product recall or IT outage—you can scale up as needed. Unanticipated spikes or declines in traffic are automatically accounted for, eliminating the need for panicked calls to vendors to obtain additional licenses or renegotiate contracts.
Myth #3: Consumption-based billing will charge for more than I want or need.
A common concern with consumption-based billing is the fear of unexpected charges or artificially inflated usage. However, it’s crucial to understand that these models are inherently limited by your available agents. Most consumption-based agreements only charge for actual interactions with agents, not for customers who receive busy signals or can’t connect. This means you’re typically billed only for the service capacity you can provide, alleviating concerns about runaway costs or surprise expenses.
Additionally, many consumption models provide cost transparency with real time usage dashboards. This allows you to carefully monitor consumption trends and proactively adjust staffing if needed to control costs.
Myth #4: I’m unable to predict costs with consumption-based billing.
While per-seat licensing may seem simpler to budget for, the reality is that contact volumes are almost never flat month-over-month. With per-seat models, you either over-provision for peak periods (and overspend) or under-provision (and face overages).
However, consumption-based billing offers a more accurate approach to cost prediction. With consumption-based pricing, you can leverage analytics on historical traffic patterns to forecast consumption needs with a high degree of accuracy. Leading vendors even provide consumption forecasting tools to simplify budgeting.
The shift to consumption-based pricing models is a big change for the contact centre industry. But as the myths above illustrate, the benefits of aligning costs with actual usage can lead to significant savings over traditional per-seat licensing.
For organisations looking to modernise their contact centre technology in 2024 and beyond, it’s time to look past the legacy seat-based pricing paradigm. By busting these myths and embracing the future of consumption-based pricing, you can optimise costs, enhance customer experience, and position your business for greater agility and competitiveness in the changing contact centre landscape.