With subscription popularity soaring over the last few years, consumers increasingly demand a frictionless subscriber experience. If the subscriber experience isn’t optimized and personalized at every touchpoint, you increase the risk of losing new subscribers and retaining existing ones. From regular billing cycles and payment options at checkout to an omnichannel brand experience, every element of the subscriber journey impacts the experience. So how do you create the ideal subscriber experience?

Just like every subscriber is different, so is every subscription business. Before building a subscription billing platform, you’ll need to take a close look at your business—both where it is today and where you want it to be in the future—and create a plan accordingly. These necessary considerations beg the questions:

  1. Do I currently have the subscription management and recurring billing technology to make this happen?

  2. Can my existing solution (and required resources) scale with my business and subscriber base as it grows?

  3. Do I have the ability to stay compliant with local and global regulations today and in the future?

And these questions are just scratching the surface. Keep reading to learn what it takes to create a frictionless subscriber experience to accommodate modern-day consumers. 

Customer experience & plan management

Think about the customer experience and plan management capabilities your business will be responsible for. Below, we've listed crucial elements of this area of consideration that require extensive resources, expertise, and time.

  1. Can you build a comprehensive account management portal? Your subscribers need an easy way to manage their subscription(s), whether they want to update their billing information, upgrade or downgrade their plan, pause their subscriptions, or make other changes. This prevents overwhelming your customer service team with small requests and allows them to focus on important issues that impact retention.

  2. Which payment methods will you offer to your subscribers? Customers want a variety of convenient payment options. Depending on where they are in the world and how technically savvy they are, they might use credit and debit cards, direct debit, PayPal, SEPA payments, Apple Pay, Google Pay, Venmo, Square Cash, and more. If you serve customers in multiple countries, you may also need to support multiple currencies. Adding a variety of currencies and payment methods to your payment mix might require more work than others.

  3. Will you need to account for different billing models? Many companies–especially SaaS businesses–choose a quantity-based or usage-based subscription pricing model, which can incentivize subscribers to purchase items in higher quantities. They can also create closer alignment between the costs you incur in delivering more products and services and the value your subscribers get out of those offerings. Ensure that you have the capacity to accommodate the right billing model for your business, as well as the ability to try new billing models that can transform the subscriber experience such as ramp pricing.

  4. What is your dunning strategy? On average, subscription businesses experience a 5-15% payment failure rate every month, which necessitates payment retries as well as customer communications. How will you reach out to customers when their payments fail? Will you automate dunning communications and/or collections? What messaging and cadence will you use (Here’s where the integration with your email provider comes in!)?

  5. How will you handle taxes? Different tax laws can make seemingly simple subscriptions surprisingly complex. Sales tax, VAT, and GST differ based on your subscribers’ locations and are constantly evolving, so it’s not just about getting it right today—you must stay compliant today and every day in the future.

  6. Can you build and scale support for account upgrades/downgrades, different billing cycles, and proration? Billing can get complicated when customers change plans (for instance, from monthly to yearly) or upgrade or downgrade, especially in the middle of a billing cycle. But these scenarios are incredibly common, and you need to prepare for them.

  7. Can you integrate your email system? If building your own solution, you’ll need to connect an appropriate email or marketing automation system to ensure your subscribers receive regular account updates and notifications whenever there’s a payment issue with their accounts.

  8. What does your coupons and promotions system look like? Offering coupons and promotions is an effective subscriber acquisition and retention strategy. Integrating these capabilities into your subscription billing platform is critical. It’s important to keep in mind how coupons and promotions will be applied to both new and existing subscribers.

  9. Recommended: How will you support free trials, gift cards, and gift subscriptions? While not mandatory, most subscription companies offer some kind of trial period as well as the option to give gift cards and gift subscriptions. These capabilities are crucial if you want to keep up with the competition.

  10. Recommended: Will you have a “pause subscription” capability? Customers may want to take a break from a subscription offer for any number of reasons. Rather than having them cancel and potentially sign up again later, a pause feature enables them to put their subscription on pause and resume it whenever desired.

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Internal requirements & planning

Internal requirements and planning should be top of mind as a growth-minded subscription business plans for long-term success. Think about this area of consideration thoroughly so you can scale efficiently when the time comes.

  1. How well do you know your business metrics? What’s your current average revenue per user? How many customers do you have today, and what are your growth objectives? What do your subscriber retention numbers look like? How many plans do you offer? All of this information and more will help you understand how to build a platform that will work for you.

  2. Do you have an internal dashboard? A subscription billing platform should help your business grow by providing you with insights into the health of your subscriptions and business as a whole. How are you collecting data, creating reports, and sharing insights that internal stakeholders need? Do you have visibility across all your subscription offerings across all your different platforms? You’ll want to build an analytics dashboard to help you track things like the performance of different plans, the impact of experiments, subscriber trends, and much more. With this information, you can make strategic decisions to propel revenue and subscriber growth.

  3. What is your retry logic strategy? Every time you retry a failed transaction, it costs you money. Using the right subscription billing tool, it’s important to create a data-driven strategy around when and how you retry transactions matters.

  4. Can you calculate your current involuntary churn rate and set appropriate targets? Every subscription company deals with involuntary churn due to failed payments; the average involuntary churn rate ranges from 5-15% monthly. It’s crucial that you calculate your current involuntary churn rate from the outset and determine the performance of your subscription billing management platform over time. Ideally, you’ll want to implement changes and bring this rate down moving forward through smart retry and dunning strategies.

  5. What is your experimentation plan for different pricing schemes? The plans that work well for your business today won’t stay optimal forever, especially as competitors, technology, and consumer tastes shift. By creating a way to A/B test different pricing plans, you’ll be able to stay ahead of the curve and offer subscribers compelling price points and plans at all times. 

  6. Recommended: How will you detect and address fraud? As ecommerce popularity explodes, so do the costs and risks of fraud. According to Javelin Research, fraud and chargeback-related expenses account for 14-23% of merchants’ operating budgets. To combat cybercrime, it’s critical that you build or integrate with a fraud prevention solution and protect your business.

A frictionless subscriber experience is made up of multiple parts, from payments and billing to subscriber communications and promotions. Failure to account for these elements may result in a spiraling customer experience. 

As a partner to some of the world’s leading subscription brands, we’ve experimented and created a state-of-the-art subscription management and recurring billing platform to help businesses manage every subscriber touchpoint seamlessly. Our machine learning-based Revenue Optimization Engine, customizable dunning, and account updater feature help businesses recover an average of 12% of revenue each month, all while keeping customers from involuntarily churning. 

Before you commit to building your own subscription management and billing solution, step back and think about where your business is and where you want it to be—do you have the tools to create your dream or should you outsource a platform?