Shadow billing, often called “showback,” is the practice of tracking and displaying the potential cost of a service during a free trial period without actually charging the user. It functions like a regular billing system, tracking usage of features and services, but instead of generating an invoice, it presents a “shadow” bill that shows the user what they would have paid based on their consumption.

This approach gives prospective customers a transparent view of the value they are receiving from the product. During a trial, a user might not realize how much they’re using a particular feature, like API calls or data storage. A showback dashboard makes this tangible, connecting their activity directly to the product’s pricing model. It educates them on the service’s value and helps them choose the right paid plan when the trial ends.

Implementing a showback system involves two main components: a data model for tracking usage and a user experience (UX) for displaying the information. The underlying mechanism is nearly identical to a standard usage-based billing model, but with the payment part disabled during the trial.

At its core, a showback model is a usage-based pricing model where the final invoice is purely for informational purposes. You define features, track their consumption, and associate a price with each unit of use.

Here’s a simplified data model for a product that offers API calls and data storage:

This table illustrates a few key concepts:

• Metered Features: Services like API calls and data storage are tracked based on consumption.
• Fixed Charges: Some plans might include flat-rate items, like a base subscription fee or access to premium support.
• Zero-Cost Invoice: The “Shadow Cost” column represents the bill the user would have received. During the trial, this amount is for display only.

The goal of the showback UX is to clearly and passively communicate value without causing confusion or making the user think they owe money. It should feel like a helpful, transparent tool, not a looming bill.

A common way to implement this is through a dashboard widget or a dedicated “Usage & Estimated Cost” section in the user’s account settings.

UX example: A trial usage dashboard

Imagine a user logs into their trial account. On the main dashboard, they see a small, clear panel:

Your Trial Summary

You’re 12 days into your 14-day Pro Plan trial.

Usage this period:

• API Calls: 15,000 / 100,000 included
• Data Stored: 50 GB

Based on your current usage, your estimated monthly cost would be $42.50. You will not be charged until you upgrade to a paid plan.

[Upgrade Now] [Learn more about our pricing]

This simple interface achieves several goals:

• It reinforces the value the user is getting.
• It sets clear expectations for post-trial costs, reducing sticker shock.
• It helps the user select the most appropriate plan based on their actual usage.

Shadow billing bridges the gap between a free trial and a paid subscription by grounding the user’s experience in real-world value. It’s a powerful tool for converting trial users into confident, long-term customers.

The key benefits of this approach include:

• Educating the customer: Users learn how your pricing works and see a direct correlation between their usage and the product’s cost.
• Setting clear expectations: When the first real invoice arrives, it’s not a surprise. The user has seen the numbers and understands the charges.
• Increasing plan selection accuracy: Users can make an informed decision about which plan best fits their needs, reducing the likelihood of choosing a plan that is too small (leading to friction) or too large (leading to churn).
• Demonstrating value: It quantifies the value of your product, making the decision to upgrade from a free trial an easier, data-driven choice.

While powerful, implementing a shadow billing system comes with its own set of challenges. The primary risk is user confusion. If not presented clearly, a “shadow bill” can look like a real bill, causing anxiety and potentially driving a prospective customer away. It’s crucial that the language used—“estimated cost,” “what you would have paid,” “you will not be charged”—is explicit and easy to understand.

Another challenge is the technical overhead. A showback system requires the same robust usage metering and rating engine as a full-fledged billing system. You need to accurately track usage, apply pricing rules, and sum up the costs, which can be complex to build and maintain in-house.

Implementing a shadow billing system requires a flexible billing infrastructure that can handle usage-based (metered) pricing. Kinde provides the core components needed to build this functionality without having to start from scratch.

With Kinde, you can define product plans that include a mix of fixed and metered features. During a trial period, you can use Kinde’s APIs to track customer usage against these metered features. While you wouldn’t trigger an actual invoice, you can pull this usage data and display it within your application’s dashboard, effectively creating a showback experience.

This allows you to leverage Kinde’s powerful metering and plan management capabilities to prove your product’s value upfront, setting the stage for a smooth and transparent transition from trial to paid subscription.

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