In today's rapidly changing technology landscape, businesses need to be agile and adaptable to stay competitive. For software companies, monetizing their products can be a challenge, and many are turning to usage-based billing models to drive revenue growth.

In this case study, we will explore how a financial services data provider, Lantern, adopted Archetype, the industry’s preferred infrastructure for usage-based billing model, and moved to a hybrid billing model (both license and usage-based) to achieve their revenue goals.

Lantern is a leading software company that provides financial trading data centered around options to institutional and retail investors alike. Lantern's platform is used by companies and traders across various asset classes and strategies to power apps, backtesting systems and more.

Lantern's existing billing system was not scalable and made it difficult for the company to monetize its services effectively. Its pricing strategy was based on number of API calls for different endpoints, dynamic pricing and access per endpoint by tiers.

Sales led customers had customized rules and limits. This presented a ton of challenges where new features added had to be manually added to the pricing/authorization models. Additionally, the team had no idea what their customers were doing specifically so had no way of understanding which endpoints were valuable for different types of customers. This approach made it difficult for Lantern to attract and retain customers who needed more flexibility and scalability in their billing. Customers would typically take a few days to a week to get onboard.

The PLG motion was fundamentally broken as they could also not edit pricing or experiment with different limits and thresholds for their smaller customers. They also had issues with the customer portal not behaving as expected.

To address these challenges, Lantern decided to adopt Archetype and add a usage-based billing component to their business model and deploy prices to customers.

Lantern's strategic initiative was to roll out a new billing model based on the actual usage of its platform, providing more flexibility and transparency to customers. The company introduced a usage-based billing model that charged customers based on the number of API calls they made to the platform. This approach allowed customers to pay only for the services they used, making it more cost-effective for them. Not only that, but adopting Archetype allowed Lantern to get better observability and control into their endpoints which allowed them to iterate pricing for a PLG motion.

Lantern also introduced a tiered pricing model that offered different levels of access based on usage. Customers could start with the basic tier and then upgrade as their usage increased. This approach gave customers more control over their costs and allowed them to scale their usage as needed.

To implement the usage-based billing model, Lantern adopted Archetype that tracked usage and generated invoices automatically. Archetype also provided real-time analytics and reporting for the Lantern team and a customer portal allowing customers to monitor their own usage and costs in real-time. This also helped provide a better customer experience for subscription management.

Lantern's new billing model via Archetype resulted in a significant increase in revenue growth. The usage-based billing model allowed the company to capture more value from its services, and the tiered pricing model provided customers with more flexibility and control over their costs. This led to savings in both time, onboarding customers, and streamlining financial processes.

The Archetype platform also helped improve the customer experience, providing more transparency and visibility into their usage and costs. Customers could monitor their usage in real-time, making it easier for them to manage their costs and stay within their budgets.

Adopting Archetype and moving to a usage-based billing model was a critical step for Lantern to achieve its revenue goals. The new billing model allowed the company to capture more value from its services, while Archetype improved the customer experience with an advanced customer portal. By providing more flexibility and control over costs, Lantern was able to attract and retain more customers, resulting in significant revenue growth for the company. The adoption of a usage-based billing model and Archetype was a success for Lantern and has strengthened its position in the market.