Glossary: Pricing & Subscription Terms | Prolifi

This page covers subscription lifecycle management and pricing model terminology. For other glossary categories, see: Platform Concepts, Billing Terms, Payments & Integration Terms, and Reporting & Global Terms.

Subscription Management Terms

Active State

Plain-language definition: The normal operating state of a subscription — the customer is on their plan, billing is running normally, and entitlements are accessible. Most subscriptions spend most of their life in the active state.

Technical definition: The active state in the subscription state machine. A subscription enters the active state after a trial period ends (if applicable) or immediately on creation (if no trial is configured). In the active state, billing cycle events execute normally, and entitlements are accessible.

Auto-Extension Entitlement

Plain-language definition: An entitlement that automatically extends itself when it would otherwise expire — without requiring any action from the customer or your operations team. Auto-extension is useful for entitlements where expiry would cause a poor customer experience and the intent is that the entitlement persists as long as the subscription remains active.

Technical definition: An entitlement type in which the expiry date is automatically advanced by the configured extension period when the entitlement reaches its expiry without being exhausted. The extension triggers an internal event that can be surfaced via webhook.

Cancelled State

Plain-language definition: A subscription that has ended. When a customer cancels — or when Prolifi cancels a subscription due to exhausted dunning — the subscription enters the cancelled state. Billing stops, and entitlements expire according to the configured expiry rules.

Technical definition: The cancelled state in the subscription state machine. Cancellation can be: immediate (subscription ends at point of cancellation, with a final invoice or credit note generated), or scheduled (subscription continues to the end of the current billing period, then cancels). Entitlement expiry behaviour on cancellation is configurable: expire immediately, expire at period end, or carry to a defined future date.

For strategies on reducing cancellations, see Cancellation & Retention.

Carry-Over Entitlement

Plain-language definition: An entitlement that does not reset to zero at the end of the billing period. Instead, any unused portion “carries over” into the next period. For example, if a customer is entitled to 100 API calls per month but only uses 60, the unused 40 carries forward and they start the next month with 140 calls available.

Technical definition: An entitlement type in which the unconsumed balance at the end of a billing period is added to the new period’s entitlement allocation, rather than being reset to the base entitlement amount. Carry-over may be capped (e.g., maximum 1 month’s worth of carry-over) or uncapped, depending on configuration.

Churn

Plain-language definition: The loss of customers or revenue from your subscriber base. Churn is one of the most important metrics in subscription businesses because it directly reduces the recurring revenue base. Churn is measured as a rate over a defined period.

See also: Voluntary Churn, Involuntary Churn, Churn Rate, MRR

Churn Rate

Plain-language definition: The percentage of customers or revenue lost in a given period. A monthly churn rate of 2% means that 2% of your subscriber base cancelled their subscriptions in that month. Reducing churn is typically more cost-effective than acquiring new customers. Industry research consistently shows that acquiring a new customer costs 5-7 times more than retaining an existing one.

Technical definition: A reporting metric in Prolifi calculated as: (subscriptions or MRR lost in period) / (subscriptions or MRR at start of period). Prolifi calculates both customer churn rate (count-based) and revenue churn rate (MRR-based) as separate metrics.

See also: Churn, Voluntary Churn, Involuntary Churn, MRR

Downgrade

Plain-language definition: When a customer moves from a higher-priced or higher-featured plan to a lower one. Downgrades typically involve a proration credit for the unused portion of the higher-cost plan and may also reduce the customer’s entitlements.

Technical definition: A subscription lifecycle event in which the active plan is replaced with a lower-priced plan. Downgrades may be: immediate (plan changes at point of request, proration credit issued for the remaining period) or scheduled (plan changes at next billing period, no proration). Entitlement reduction behaviour is configurable: immediate reduction or reduction at next period.

See also: Upgrade, Proration, Entitlement, Subscription

Expirable Entitlement

Plain-language definition: An entitlement that expires on a specific date or after a specific period, regardless of whether it has been used. After the expiry date, the entitlement is no longer accessible and any unused balance is lost (unless carry-over is configured).

Technical definition: An entitlement type that carries an expires_at timestamp. The expiry may be: fixed (a specific calendar date), relative (N days from subscription start or last renewal), or period-aligned (expires at the end of the current billing period). On expiry, the entitlement state transitions to expired and a webhook event is emitted.

Involuntary Churn

Plain-language definition: When a customer loses their subscription not because they chose to cancel, but because a payment failed and could not be recovered through dunning. This is sometimes called “passive churn.” Industry research indicates that up to 40% of subscription churn is involuntary — driven by expired cards, failed payments, and declined transactions.

Technical definition: Subscription cancellation triggered by payment failure events that exhaust the configured dunning retry sequence. Involuntary churn is distinguished from voluntary churn in Prolifi’s reporting by the cancellation reason code attached to the cancellation event (payment_failure vs. customer_request).

To reduce involuntary churn, configure smart retry and dunning workflows. See Dunning & Payment Recovery.

See also: Dunning, Voluntary Churn, Churn, Smart Retry

Lifecycle

Plain-language definition: The full journey of a subscription from creation to cancellation. The lifecycle includes: trial period (if applicable), active billing period, any pauses or plan changes, and ultimately cancellation. Understanding the lifecycle is important because each stage has implications for billing, entitlements, and revenue recognition.

Technical definition: The state machine governing a subscription’s progression through defined states: trial -> active -> paused -> cancelled -> reactivated. Each state transition is an event that triggers downstream effects including invoice generation, entitlement adjustment, proration calculation, and webhook emission.

Paused State

Plain-language definition: A temporary suspension of a subscription. When a subscription is paused, billing stops and (depending on configuration) entitlements are either paused or retained. Customers who are going through a difficult period can pause rather than cancel — which reduces churn and preserves the relationship.

Technical definition: The paused state in the subscription state machine. Pause can be: fixed-duration (the subscription automatically resumes after a configured number of days) or indefinite (the subscription remains paused until explicitly resumed). During pause, invoice generation ceases. Entitlement behaviour during pause is configurable: suspend (entitlements inaccessible) or retain (entitlements remain accessible).

Reactivation

Plain-language definition: When a previously cancelled subscription is started again. Reactivation restores the customer’s access and resumes billing. The specific mechanics (whether a new subscription is created or the old one is reinstated) depend on platform configuration.

Technical definition: The process of reinstating a subscription that is in the cancelled state. Depending on configuration, reactivation either: (a) creates a new subscription object linked to the same customer and plan, or (b) transitions the existing cancelled subscription back to active with a new billing anchor date. Proration for the reactivation period is calculated from the reactivation date.

See also: Subscription, Lifecycle, Cancelled State

Trial Period

Plain-language definition: A defined period at the beginning of a subscription during which the customer has access to the plan but is not yet charged. Trial periods are used for customer acquisition — give the customer access first, charge later. At the end of the trial, the subscription automatically converts to active and billing begins.

Technical definition: A configurable property on a plan that specifies a number of days before the first invoice is generated. During the trial period, the subscription state is trial. At trial expiry, the state transitions to active and the billing cycle begins. Entitlements may be provisioned during trial at full or restricted levels, depending on configuration.

See also: Subscription, Lifecycle, Active State

Upgrade

Plain-language definition: When a customer moves from a lower-priced or lower-featured plan to a higher one. Upgrades typically trigger immediate proration — the customer is charged for the additional value from the upgrade date to the end of the current billing period.

Technical definition: A subscription lifecycle event in which the active plan is replaced with a higher-priced plan. Upgrades may be: immediate (an immediate proration invoice is generated for the period from upgrade date to period end) or scheduled (plan changes at next period, no proration). Entitlement upgrades are provisioned immediately regardless of the invoice timing configuration.

See also: Downgrade, Proration, Entitlement, Subscription

Variable Entitlement

Plain-language definition: An entitlement that is measured and tracked — the customer has a defined quantity and their consumption is counted against that quantity. A variable entitlement might be “100 API calls per month” or “5 active projects.” The system tracks how much has been used and how much remains.

Technical definition: An entitlement type with a configured quantity and a consumption counter. Each consumption event reduces the remaining balance. When the balance reaches zero, the entitlement is in the exhausted state. The API returns the current balance on entitlement queries, enabling your application to enforce limits or trigger upsell prompts.

Voluntary Churn

Plain-language definition: When a customer actively chooses to cancel their subscription. Voluntary churn is a signal of customer dissatisfaction, a better alternative, or changed circumstances. It is distinct from involuntary churn (payment failure) and requires different retention interventions.

Technical definition: Subscription cancellation triggered by a customer-initiated cancel action or API request with a cancellation_reason of customer_request. Voluntary churn is recorded in the subscription audit trail and surfaced separately from involuntary churn in Prolifi’s churn analytics.

Pricing Terms

Dynamic Pricing

Plain-language definition: A pricing model where the price can change based on defined rules or external triggers — for example, varying by time of day, customer segment, market conditions, or demand signals. Dynamic pricing is common in utilities, travel, and AI services where cost inputs fluctuate.

Technical definition: A pricing model in which the charge per unit is determined by a rules engine rather than a static configuration. The rules engine evaluates defined conditions (time of day, customer attributes, external variable inputs) to calculate the applicable rate at the point of billing. Dynamic pricing rules are configured at the pricing plan level.

See also: Pricing Model, Usage-Based Pricing, Hybrid Pricing

Fixed Pricing

Plain-language definition: The simplest pricing model — the customer pays a flat, fixed amount regardless of how much they use the product. A monthly flat fee is fixed pricing. The amount does not change based on usage or other variables.

Technical definition: A pricing model in which the invoice amount for each billing period is a fixed, configured value. Fixed pricing does not require a value metric or usage aggregation. It is the default pricing model for straightforward recurring or one-off billing.

See also: Pricing Model, Per-Unit Pricing, Value Metric

Hybrid Pricing

Plain-language definition: A pricing model that combines two or more pricing approaches. For example, a base fixed fee plus a variable usage charge. Hybrid pricing is common in SaaS products that want to guarantee baseline revenue (via the fixed component) while also capturing value from high-volume users (via the usage component).

Technical definition: A pricing plan configuration in which multiple pricing model types are combined. The most common hybrid configurations are: fixed + usage-based (subscription + overage), fixed + per-unit (platform fee + seat charge), and tiered + fixed (tier-based pricing with a floor price). Each component is evaluated independently and combined into a single invoice.

See also: Pricing Model, Fixed Pricing, Usage-Based Pricing, Tiered Pricing

Per-Unit Pricing

Plain-language definition: A pricing model where the charge is calculated by multiplying a fixed unit price by the number of units consumed. If you charge £10 per seat and a customer has 5 seats, the charge is £50. As the customer adds or removes units, the invoice changes proportionally.

Technical definition: A pricing model in which the invoice amount is: unit_price x quantity. The quantity is either: (a) a fixed quantity set at subscription creation, (b) a quantity that can be updated by the customer or admin, or (c) derived from usage events (equivalent to simple usage-based per-unit billing). Per-unit pricing does not apply tier thresholds — the same rate applies regardless of quantity.

See also: Volume Pricing, Tiered Pricing, Value Metric

Price Ramp

Plain-language definition: A pricing structure where the price changes over time according to a predefined schedule. For example, a customer pays £500 per month for the first three months, then £750 per month for the following three months, then the full £1,000 per month thereafter. Price ramps are used to reduce friction in acquiring customers while moving them toward full commercial value.

Technical definition: A time-series pricing configuration attached to a plan in which the effective price changes at defined intervals. Price ramp schedules define: the start price, the target price, and the schedule of transitions (dates or periods). The billing engine applies the correct price for each billing period based on the ramp schedule.

See also: Pricing Model, Discount, Subscription

Stair-Step Pricing

Plain-language definition: A pricing model where customers move to a completely different flat price when they cross a usage or quantity threshold — rather than paying a different rate only on the units in the new band (as in tiered pricing). If you have stair-step pricing with bands at 0-100 units for £100/month and 101-500 units for £300/month, a customer who uses 101 units pays the full £300, not £100 + a marginal rate on the additional 1 unit.

Technical definition: A pricing model in which the total invoice amount is determined by which pricing band contains the total usage or quantity, and the entire amount charged is the flat rate for that band. This differs from tiered pricing, in which each band’s rate applies only to the units within that band. Stair-step pricing produces non-linear revenue curves and can create strong incentives to stay just below threshold quantities.

Tiered Pricing

Plain-language definition: A pricing model where different portions of usage or quantity are priced at different rates. The first 100 units might cost £1 each, the next 400 units £0.80 each, and units above 500 £0.60 each. Each tier has its own rate, and a customer who uses 600 units pays: (100 x £1) + (400 x £0.80) + (100 x £0.60) = £100 + £320 + £60 = £480.

Technical definition: A pricing model in which the configured price bands each apply only to the quantity of units within that band. Prolifi evaluates the total usage/quantity and applies the rates sequentially across tiers. Tiered pricing is commonly used for usage-based billing where you want to reward volume with lower unit costs without the cliff-edge effect of stair-step pricing.

For guidance on configuring tiered and other pricing models, see Product Catalog & Pricing.

Usage-Based Pricing

Plain-language definition: A pricing model where the charge is determined by how much the customer uses the product in a billing period. The price is not fixed — it varies based on consumption. This aligns price with value: customers who get more value pay more.

Technical definition: A pricing model in which the invoice amount is calculated from usage events ingested during the billing period. The usage total is computed by the configured aggregation method (sum, max, last value, percentile), then the result is applied to the pricing model (per-unit rate, tiered bands, or volume bands) to produce the billable amount. Usage-based pricing requires a linked usage metric configuration.

Volume Pricing

Plain-language definition: A pricing model where the unit rate decreases as total quantity increases — but the discounted rate applies to all units in the order, not just the units above the threshold. If 1-100 units cost £1.00 each and 101-500 units cost £0.80 each, a customer who orders 200 units pays 200 x £0.80 = £160 (not 100 x £1.00 + 100 x £0.80).

Technical definition: A pricing model in which the total quantity determines which rate band applies, and that rate is applied to the entire quantity. This differs from tiered pricing, where each band rate applies only to the units within the band. Volume pricing can create strong incentives for bulk purchasing and is common in wholesale and high-volume API billing.