Pricing
What is Entitlement Management?
It ensures that subscribers receive the exact features and capabilities they've paid for, based on the pricing tiers, add-ons, and additional charges they subscribe to.
Components of Entitlement Management
1. Feature provisioning
Feature provisioning defines which features are unlocked with different pricing tiers of your product or service bundles. Depending on your industry and pricing model, this can range from the number of articles a subscriber can read to the number of user licenses a company can add or the number of consulting sessions a customer can have per month.
For example, Spotify Premium offers ad-free music listening and high audio quality (see highlighted portions in the image). In other words, Spotify must provide (or provision) these features in its Premium plan.
But there’s more—within Premium, they offer Student, Individual, and Duo tiers with differences in subscription entitlements, such as the number of Premium accounts and audiobook listening hours.
For complex B2B subscription workflows, this becomes even more intricate:
Your product catalog will have more components—plans, add-ons, one-time charges, and sometimes different plan variants for different subscriber cohorts.
Hybrid sales motions—some sign up for a trial and subscribe online; others go through complex sales motions, manual account activation, and provisioning.
Entitlements might also have a service layer attached. For example, all paid customers can access 24/5 email support, but enterprise plan customers get live chat and a dedicated Customer Success Manager (CSM).
2. Access management
Access management ensures your customers have accurate, real-time access according to your provisioning logic. For instance, each time you open a document via Google Docs, it checks whether:
Your company has access to Google Docs
You, the specific user, are allowed to view that particular document
You have view-only, comment, or edit access to the document (known as Role-based Access Control or RBAC).
Additionally, customers may have multiple accounts and subscriptions with different plans and entitlement levels. If a user exits the company, you must revoke their access without affecting other users. You can also grant specific customers access to features that aren’t part of their plan by default.
If you're still thinking this sounds simple, try asking your Engineering friends how much they enjoy managing feature provisioning—but don't say I didn't warn you :)
3. Monetization
Monetization includes pricing and packaging strategies that convert your product or service offerings into revenue. This includes:
Packaging experimentation: Moving features and capabilities across plans or add-ons, changing feature quantity limits, and more to experiment and achieve the optimal packaging fit.
Feature usage analytics: Tracking feature usage against entitled limits helps you understand feature performance and revenue potential.
Consumption tracking and paywalls: After monitoring feature usage against entitled limits, the next logical step is to deploy paywalls or equivalent mechanisms to encourage customers to move to a higher pricing tier.
Automated billing: Ensuring accurate billing based on usage and considering all mid-cycle entitlement changes.
Role in subscription businesses
Entitlement management is crucial in your subscribers' lifecycle across different touchpoints. It facilitates:
Activating appropriate products and services for each customer
Allocating the right features and usage limits based on their plans
Ensuring users can access only what their roles and permissions allow
Overriding default feature limits for select customers as needed
Launching new product capabilities to specific customer cohorts
Understanding how customers use your product/service relative to their entitlements
Iteratively packaging features and product bundles to maximize revenue
Explore more on Entitlement Management with our top resources
Mastering Entitlement Management: Overcome business and technical challenges to accelerate GTM innovation and improve monetization
5 warning signs of failing in-house entitlement management: Key questions to assess the effectiveness of your current approach to provisioning
Phrase's success story: How the world leader in translation technology optimized product activation, feature provisioning, and usage-based pricing with streamlined entitlements
Expert webinar: Insights from Phrase’s CFO and Engineering Lead on pricing and packaging strategies
Disclaimer: The screenshot of Spotify's pricing page used above is for illustrative purposes only. Spotify is a trademark of Spotify AB. All trademarks, logos, and brand names are the property of their respective owners. Use of these marks does not imply any affiliation with or endorsement by Spotify.
