The subscription-based business model is transforming every global business. This trend has reached new heights in the last decade, especially in the software, media and entertainment industries. Netflix, Spotify, LinkedIn Premium, and AWS are some of the top relevant examples in the tech industry that may charge you on a weekly, monthly, quarterly or yearly subscription basis. Everyone including MSPs, B2B SaaS firms and the end-users love the model due to its lower costs of entry, convenience, predictability and scalability.
However, the process of managing a subscription business is filled with complexities and involves dynamic challenges – the most important being billing management. As a subscription service provider, you need to keep your billing processes running like a well-oiled machine.
So, what’s the solution?
The way forward is a reliable subscription management software.
What is a Subscription Management Software?
Subscription management deals with everything related to customer lifecycle operations like handling trials, assigning credits, processing refunds and deploying mid-cycle subscription changes. It is different from recurring payment processing, as it involves billing actions that can’t always be scheduled.
Subscription management software is what makes it happen. It works on top of the payment processor. The ROI associated with reliable subscription management software is phenomenal by some estimates. It is at the heart of conducting any subscription-based business as it allows customers to use your product with flexibility and ease.
Some of the popular platforms are Chargebee, Stripe, Zoho, and Recurly.
Key Features to Consider When Choosing a Subscription Management Tool
Here, we discuss some of the key factors you should consider while choosing a subscription management system for your MSP or SaaS or any other subscription business.
Invoice Management
Subscription management goes beyond the mere handling of existing customer subscriptions. To foster business growth, it is crucial to concentrate on generating new sales. A streamlined subscription payment collection system plays a pivotal role in enhancing the user experience for both new and current customers. The following outlines the approach:
For New Customers: New customers anticipate a swift and efficient checkout procedure. If your subscription management solution necessitates excessive information or entails an inefficient process that consumes significant time, potential customers may opt to explore alternatives instead of finalizing their orders.
For Existing Customers: Payments from existing customers may occasionally expire or decline. In such cases, it becomes necessary to send them a message requesting an update to their payment method. The likelihood of compliance is significantly higher when the process is user-friendly and uncomplicated.
Custom Pricing, Discounts, Coupons and Free Trial Options
Subscription billing is a multifaceted process that varies across companies. While certain companies opt for a single plan and fixed monthly price, some in the industry go a step further by providing a range of options encompassing diverse pricing models and additional features that impact the service’s cost. These features can include free trials, coupons, and time-limited discounts.
To ensure seamless integration of such features into your sales funnel, it is crucial to select a subscription management solution that simplifies the whole process. Equally significant is choosing a solution that doesn’t impose an additional fee to access these types of features.
Customization Features
Customizing key customer touchpoints is of utmost importance when it comes to subscription management. These touchpoints encompass emails, invoices, marketplaces, and more.
A reliable subscription management platform should offer extensive customization options for service providers. For instance, if you wish to send personalized email notifications to your customers, the automation tool should allow you to customize existing formats or create new ones. You should have the flexibility to add your own logos, placeholders, CTAs, and other elements in email communications.
Likewise, on the marketplace front, you should have the ability to tailor the product catalog, branding, plans, headers, footers, and other crucial page elements. It is also important to verify if the tool enables you to customize the checkout page.
Furthermore, it is worth checking if the platform supports various APIs and widgets that facilitate easy pricing setup on your website, without necessitating any coding.
Business Insights and Data Analytics
Businesses do not thrive in isolation. As a business owner, having access to data and analytics is crucial for making informed decisions and charting the most effective path to grow your business. Unfortunately, many subscription management services offer only minimal data, such as the number of subscriptions and payment amounts received.
However, top-tier solutions surpass these limitations by providing comprehensive data-driven tools. These include:
Subscription Data: Leading providers offer insights into the performance of different subscription services, allowing you to identify areas that excel and areas that require adjustments.
Pricing Models: Some services allow you to fine-tune your pricing models, enabling you to explore optimization opportunities and maximize revenue generation.
Accounting Integrations: Certain services integrate seamlessly with accounting software, linking your subscription tracking data with your financial records. This integration provides a holistic view of your company’s financial performance.
Inventory insights: You should be able to get a complete insight into total hardware/software, unused assets, CPU load, disk space, bandwidth, memory, etc. This is a must-have if you are a cloud service provider.
Smart forecasting: With inventory forecasting, you should be able to see the current availability of assets and upcoming demand based on your sales leads.
By leveraging these advanced data capabilities, you can make informed decisions, optimize pricing strategies, and gain a comprehensive understanding of your business’s financial health.
Hassle-free Package Upgrade/Downgrade
Flexibility is a key factor that subscribers prioritize when selecting a subscription service. Whether it’s a SaaS product or a gaming subscription, customers expect the ability to upgrade to a higher plan or downgrade to a lower-priced plan, as per their needs.
An effective subscription management tool should empower customers with seamless options to upgrade or downgrade their service. This process should be simple and convenient, requiring just a single click. When evaluating subscription management software, it is important to inquire whether the platform supports a one-click service upgrade or downgrade feature. This ensures that customers have the flexibility they desire and can easily adapt their subscriptions to align with their evolving requirements.
Simple Pause and Resume
Just like the upgrade and downgrade options, the pause and resume subscription feature grants customers the flexibility to temporarily halt a service when it is not actively utilized.
Let’s consider a situation where a customer subscribes to a magazine service. Suppose they plan to go on a vacation for a few months and prefer to temporarily suspend payments for the service during that period. In such cases, customers should be able to effortlessly pause their subscriptions through a user-friendly self-service portal with just a few clicks.
An all-encompassing subscription management system should empower customers with the ability to easily pause and resume their services. This particular feature holds significant importance, especially for providers of cloud subscription services. It enables customers to suspend specific resources whenever necessary and promptly resume them as per their requirements, ensuring the highest levels of convenience and control over their subscriptions.
Data Privacy, Security and Fraud Prevention
Regrettably, with the ongoing advancements in technology, scammers will persistently employ technological means to target and pilfer sensitive customer information. As a responsible business owner, it is imperative that you take all necessary measures to safeguard your customers from these malicious actors.
Your payment processing solution serves as the primary barrier of protection.
By ensuring that your payment processing solution implements robust data encryption measures to secure customer information, you can confidently trust that even in the event of a data breach, any unauthorized access would render the obtained data unreadable to potential hackers.
Reliable Customer Support
Consider a scenario where your subscription management service encounters a glitch and inadvertently sends invoices to all your customers for items they haven’t ordered. In such a situation, you would require immediate assistance and a prompt resolution.
However, exceptional customer support is not limited to troubleshooting problems alone. In fact, when it comes to a service that can significantly impact the success or failure of your business, the provision of high-quality customer service is paramount. It plays a vital role in building trust, fostering positive customer experiences, and ultimately contributing to the overall success of your enterprise. A reliable service must provide prompt support over emails, social media platforms (Twitter, LinkedIn etc.) and phone.
Tax and Compliance Support
Subscription businesses handle a huge amount of customer data and information. Therefore, it is essential to regularly monitor and evaluate the security standards to adhere to various data privacy regulations and policies.
When choosing a subscription business tool, it is crucial to ensure that it meets all industry compliance and regulatory requirements. This not only safeguards you from legal implications but also aids in minimizing errors and promoting financial transparency.
Verify if the platform provides centralized repositories of data and the capability to download reports. This feature streamlines the auditing process, reducing the time and effort required. Additionally, the system should offer support for multiple currencies (particularly if you operate or plan to expand globally) and accommodate various tax levels and rules.
By selecting a subscription business tool that satisfies these criteria, you can maintain compliance, enhance financial transparency, and operate efficiently within the legal framework.
Software Integrations
It is essential to verify if the subscription management platform offers support for a range of integrations. Integrations play a vital role in optimizing operations and facilitating seamless interaction with third-party applications.
Your software should have the capability to integrate with other systems such as ERP & CRM software, Tally, Livechat, and more. Furthermore, the availability of integrations may vary depending on the specific requirements of your business.
Failed Payment charges
Subscription billing services, much like your own business, operate with the objective of generating revenue. Typically, they generate income by levying a small fee for each transaction conducted through their service. However, a significant drawback arises when some of these services continue to charge fees even when a payment fails.
In the subscription business, payment failures can reach a substantial 10%. This figure can result in substantial costs incurred for each failed transaction.
The truth is, credit and debit cards expire, and there are various reasons why payments might fail. Therefore, it is highly recommended to collaborate with a subscription management company that prioritizes your business’s interests and doesn’t burden you with additional charges for failed payments.
Look for a service provider that demonstrates genuine concern for your business and avoids excessive fees for unsuccessful transactions.
Conclusion
Overall, these services aren’t all the same. Choosing a faulty subscription management solution could create problems like dwindling revenues thanks to high involuntary churn rates. On the other hand, the best solutions give you the data to help grow your business. They scale with you as you do.
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