Let’s start with a quiz.
What is the difference between a discount and a credit?
In simple words, a named coupon is a discount whereas an ad hoc discount can be defined as a credit.
When you want to promote a product via let us say, a lean start-up bundle through promotions, you can create a coupon code in ChargeBee called XYZSTARTUPOFFER2013 as coupon code and distribute it. So, any customer signing up would apply this coupon code themselves and signup to claim the discount.
However, if you do have a specific customer who needs it, you may apply a similar discount as credits to convert, up-sell or retain them.
In the context of SaaS world, you may identify the differences based on where it is used; a discount is used as a coupon to make a sale / convert a customer whereas a credit is used to retain a customer and avoid churn. There are no limitations for either one and you may find different ways of using discounts and credits.
What is more important is having the ability to apply these discounts in your billing system, when necessary.
Here is an example of how Balsamiq used customer credits to retain users after a service outage & used the crisis as an opportunity to increase customer loyalty.
In a gist this is what happened. Balsamiq had a service outage for 4 hours with their then recently launched SaaS version of the mock-up tool. To avoid customer churn, they applied 3 months of usage credit across the board to all customers. They probably lost 3 months of revenue, but won over the hearts of customers and their loyalty for a lifetime, by doing the right thing proactively, no questions asked.
Using ChargeBee, credits can be manually added to a subscription by the merchant or automatically by the system. Merchants can easily look up a subscription, add the credit amount, and let nature take its course (ChargeBee actually takes it from here). Also when a subscription is prorated, the system automatically updates the available credits.
To read more about using credits, please click on the link below: