The Hidden Cost of Poor Monetisation - Are You Losing Millions?

 Revenue isn’t just earned, it’s engineered. And yet, many companies see monetisation as a back-office issue, a problem for finance or billing operations to solve. That’s a costly mistake.   

Monetisation is about profit, not just pricing. Companies that fail to modernise their monetisation stack risk inefficiencies, lost revenue and stagnation. Another way of looking at it is this: businesses don’t fail because they lack customers, they fail because they fail to monetise them successfully. AWS, Azure, and other cloud giants have demonstrated that flexible, usage-based billing is the future, so why do other SaaS companies hesitate to adopt these models? Because they assume it’s too complex, too hard to implement, or too risky. None of this is true.    To make matters worse, many SaaS companies bleed revenue, often underestimating the scale of the loss. By leaving money on the table, they not only miss growth opportunities but also create barriers to user adoption and expansion. 

When customers struggle to justify costs or feel locked into inflexible pricing plans, they hesitate to scale with your product, or worse, they seek alternatives. This friction directly translates to substantial revenue loss. 

The true cost of revenue leakage 

Revenue leakage isn’t an abstract concept; it’s millions slipping through the cracks while your team wastes hours fixing avoidable billing errors.   SaaS businesses are typically valued based on a multiple of Annual Recurring Revenue (ARR). A mere 3% to 5% of revenue leakage could slash operating profit margins by up to 50%, putting the company at risk of losing significant potential value. For example, over five years, a $10 million ARR company growing at 20% annually but experiencing 3% revenue leakage will have $2.2 million less cash to reinvest and be valued at least $5.1 million lower in a sale or fundraise. 

This compounded effect over time is staggering - after ten years, revenue leakage could depress the valuation by as much as $12 million. This demonstrates why SaaS companies should optimise their monetisation stack and address inefficiencies. These numbers prove that doing nothing is not an option.   To combat revenue leakage and unlock new revenue, many SaaS companies are turning to usage-based pricing (UBP) models. 

UBP is reshaping SaaS success metrics 

The early years of SaaS created nice, predictable subscription revenue. Now, according to a 2022 OpenView survey, 61% of SaaS companies either have UBP or are actively testing it. Additionally, 46% are experimenting with hybrid models that combine traditional subscriptions with usage-based elements. 

Today’s buyers expect pricing to adapt to their needs. How often have you heard something like this?    "Sure, we’re buying your platinum package, but we’re never going to use [Feature X], so why are we paying for it?"  

And it’s not just about adoption rates - UBP is redefining SaaS success metrics. These days, it seems like SaaS pricing comes back to the same questions:  

• Is usage-based pricing growing? It is.  

• Does it boost critical SaaS KPIs like Net Revenue Retention (NRR)? It does. 
  

The explosive growth in AI and LLM technologies is also accelerating the need for dynamic pricing models. Forbes notes that the AI market is on track to reach a staggering $1.8 trillion by 2030, reflecting a CAGR of 37.3%. As AI-powered applications drive new software usage patterns, traditional flat-fee pricing structures are becoming obsolete.   The rise of UBP means your monetisation stack must evolve so your billing system can handle the complexities. 

The monetisation overhaul you want (not the nightmare version) 

When companies review their monetisation stack, the pain points are often rooted in traditional subscription tools that struggle and fail to calculate complex pricing metrics. This leads to slow invoicing, revenue delays, and costly errors.   Furthermore, these systems often lack the flexibility to integrate smoothly with key tools such as CRM, CPQ, and ERP, making it difficult to streamline data across departments.   To address these issues, businesses need better tools. Just as platforms like Zapier and Workato have simplified integrations and democratised automation, scalable and flexible monetisation software enables seamless experimentation in both test and production environments. 

By integrating pricing, packaging, metering, and billing into a single, cohesive system, businesses can eliminate inefficiencies, automate complex billing calculations, and ensure accurate, timely invoicing.    This approach transforms billing and pricing operations from a mundane back-office function into a strategic capability.    Want millions? The $100M ARR monetisation example  Optimising your monetisation stack directly impacts your bottom line. Companies with an Annual Recurring Revenue (ARR) of $100 million typically see:  

• Reduced Revenue Leakage: Preventing missed billing opportunities can recover up to $5.26 million in gross profit.  

• Improved Customer Retention & Expansion: Usage-based and flexible pricing models encourage adoption and drive annual expansion revenue, adding $315,000 in profit.  

• Accelerated Pricing Adjustments: Faster time-to-market for pricing changes can generate $831,300 in additional revenue.  

• Increased Sales Productivity: Automating pricing-related tasks can free sales reps to close deals, adding up to $4.9 million in gross profit. 

• Operational Efficiencies: Automation reduces time spent on manual billing, freeing finance and engineering teams for higher-value tasks and saving up to $40,000 annually.  
  

We can see how real-time data access transforms operational decision-making.  

If only we understood what our trial users were doing… 

Historically, product teams have had limited exposure to the financial impact of their decisions, while sales teams have struggled to access or interpret product usage data. Instead of wondering, "If only we understood what our trial users were doing," companies can now confidently say, "Because we understand what our trial users are doing, we can deliver a best-in-class, personalised experience."    Similarly, sales teams can leverage real-time usage data to identify whitespace opportunities and drive meaningful conversations.    A broken billing system is a strategic liability    Your best salespeople should be closing deals, not battling outdated pricing approvals. Your engineers should be innovating, not maintaining a billing Frankenstein. A broken billing system isn’t just an operational headache, it’s a strategic liability. But it doesn’t have to be that way. Solutions that work seamlessly alongside existing CRM, CPQ, and ERP systems offer a cost-effective, low-risk path to modernisation. Rather than replacing core systems, they act as an invisible enabler, providing the data infrastructure to handle complex usage metering and rating, along with an integration layer that automates data flows across systems.   As a result, what used to take days now takes hours. What was once error-prone is now error-free. Finance teams are no longer bottlenecks, blocking new pricing, delaying invoices, or dealing with constant firefighting.