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A Services Credit Model “in a Nutshell”

A services credit model is a strategic approach to selling and delivering professional services. It allows clients a convenient way to prepay for services while giving teams the flexibility to utilize credits that are pertinent to their work. Drawing an analogy to arcade tokens, Rick Pearson explains that with a service credit model, clients purchase services credits, which are then available for future use to redeem for different services, such as training and other prescriptive services. This model works well for both providers and consumers by offering a flexible method to access various services without having to rework contracts.

The trend of services credits seems to be on the rise, driven in part by a recommendation in a TSIA report from a couple of years ago. Rick notes, however, that widespread adoption may have been hindered by a lack of support in existing tools to enable efficient management of services credit models. The good news — the concept is straightforward and so is the solution. 

It’s easy to manage services credits with PSA

It’s easy to handle a services credit model for clients using Certinia Professional Services Cloud. In a nutshell, the solution tracks credit purchases and credit usage (maintaining balances, handling usage and billing) making it easy to support a professional services credit model. 

It’s fairly straightforward to extend and customize Certinia’s Professional Services Automation (PSA) features since the core concept aligns well with the capabilities already in Certinia. The solution Rick prescribes involves tracking credit purchases, maintaining balances, drawing down credits, and, in some cases, integrating billing into the PSA system for margin tracking.

One crucial aspect of the solution is tracking the value of each credit, as PSA primarily operates using hours and currencies. With credits, clients are interested in tracking revenue, delivery margin, and other metrics associated with credit usage. The unit of measure for service credits varies, with some clients linking them to specific classes or services, and the conversion to a unit of currency is often determined after calculating the value of credits.

Careful planning leads to success with services credits

Rick advises clients considering service credit management with PSA to carefully plan their portfolio of services offered through credits. Harmonizing diverse services with different credit values can be challenging, as seen in the example of a client with prescriptive services, education credits, and coaching, each with distinct credit values.

Despite the potential complexity, Rick encourages clients with a mixture of traditional services projects and service credits to incorporate this solution. Once accounted for in PSA, the management process is similar, with revenue recognition being the primary consideration for services delivered using credits.

Services credits are a valuable tool to sell services

In conclusion, service credit management can be a valuable tool for selling services upfront, simplifying the procurement process, and encouraging clients to utilize prepaid services. While the implementation may require customization, the benefits of flexibility and upfront revenue capture make it an attractive option for businesses offering a variety of services.

In our next post, we discuss how organizations can automate services credit management in Salesforce with PSA. If you’re still trying to move to a professional services subscription model, take a look at this TSIA post – it provides 7 Steps to Create a Professional Services Subscription model, one of the way includes using services credits.