Application Programming Interfaces (API) are is a method for developers and website owners to connect their product to another product. For example, think about all the tools that use Twitter, Instagram and Facebook to get a customer’s data, developers will more than likely be using the respective API to connect and access the data.
I’ve used API’s in one way or another over my career, I’ve created APIs that have enabled businesses to access my product data. The majority of the time this access comes for free, it’s a win-win for the developer and the source product owner. Sometimes, however, APIs are accessible for a fee.
Fees for APIs come in various forms but the common ones are:
- Cost per call (e.g. $0.001/per API call)
- Monthly fee ($25 per month for a number of calls, this may be tiered to higher prices depending on the volume of access you are creating).
- Credits (Various API calls have a certain amount of credits per call, credits are bought in advance on either a monthly or pay-as-you-go basis).
This last month I’ve been working on an idea, it required a specific API and it was going to cost me money to do so. So hunting around for data sources I found one that would fit the bill, the price was great and looked like it was discounted. So hitting the on PayPal subscribe button I paid my dues and got to work……
I got the data I was looking for and I’d only used less than 1% of my monthly quota. Come the end of the first period I wondered when the next payment was going out. I knew I’d get a PayPal email so wasn’t in a huge hurry to find out. What I read took me by surprise as I’d been charged nearly twenty-five times the price I was expecting…. surely a mistake. I go back to the website, then I saw the small print. The first month excellent price was the trial rate, after which I’d have to give a number of days notice to cancel the trial.
I’m not here to knock the company, I’m not even going to name them. Ultimately I’m responsible for my actions here. It did however get me thinking, if it was my company what would I do when charging for API access. Three things come to mind and I’d like to share them with you.
Confirm The Terms With a Checkbox
If your service depends on PayPal subscriptions, or Stripe and other payment providers, then make sure your customer is crystal clear about what they are about to sign up to. Terms and conditions of the transaction are upfront and clear, the trial cost and then the ongoing costs. Be very clear about trial rates and what will happen and the future charges involved. Don’t worry if this becomes another step in the process, your customer will thank you for this now rather than angry or rant like emails after the trial is over.
Send a Reminder
Give your customer time to cancel but don’t expect them to remember they signed up. Customer success revolves around good communication. An email ten days prior to the end of the trial period and the increase in the fee is only good manners, no one likes to get caught out. At this point you can re-connect with your customer, remind them they are signed up and the trial period is coming to an end. Be clear that the price is going up and if they wish to cancel then this is the time to do it so they are not charged by surprise.
This ends up being a two way thing, the customer might have questions, they might have feedback. The positives of a good reminder are huge here, there is so much opportunity to create better customer service, a better product and a better experience.
Measure the Usage
Most API access comes in tiered usage billed on a monthly basis. The first 1,000 calls might be free, the next 10,000 will cost an amount and the cost increases for each usage band a customer uses. Sometimes a customer can signup for access and go all in for the highest tier and hardly use it.
Once again, email wins here. Now there’s an opportunity to connect with the customer again. “We see you’ve only used 1% of your access allowance.” prior to the renewal time or next subscription payment. This kind of calculation shouldn’t be a difficult one, with the amount of tools out there on the market now, even a spreadsheet will do, you can create a lot of value by either encouraging the user to use the API more or say that you will charge a lower tier amount as it looks like they will never get to that level.
The customer touch points here are a big deal, it means they know that you care about being fair with their business, you want to help them succeed and in turn there’s a good probability they will recommend your service to other people.
Regardless of how your service works, creating multiple touch points for customer success will only do your company good in the long run. The customer will feel valued and there’s an increased chance of more trade. No one likes nasty surprises, whether it’s the customer’s fault or not.