In April 2024, Recurly commissioned Forrester Consulting to study the challenges and opportunities in subscription management and recurring billing solutions for consumer subscription brands. The study found several critical ways current subscription technologies are falling short and hindering growth. Keep reading for eight key issues based on relevant statistics from this insightful study.

1. Lack of flexibility

Flexibility is vital for personalizing offers and meeting diverse subscriber needs. Notably, 69% of organizations reported that their current technology lacks the flexibility necessary to adapt to changing consumer preferences. This rigidity can make it difficult to introduce tailored offers, which are essential for customer satisfaction and loyalty.

2. Friction with multi-gateway orchestration

The ability to seamlessly manage payments across multiple gateways is crucial for a smooth customer experience. However, 63% of respondents indicated that their existing billing technology introduces friction in this area, which can lead to failed transactions and lost revenue opportunities.

3. Lack of churn management capabilities

Effective churn management can significantly impact customer retention and lifetime value. Over half (56%) of the companies surveyed struggle with inadequate churn management capabilities in their current tech stack, which can make it challenging to identify and address the causes of customer turnover effectively.

4. Lack of scalability 

As subscription businesses grow, their technology needs to scale appropriately. Sadly, 55% of organizations pointed out that their current systems are not scalable, complicating efforts to expand into new markets or add new products without experiencing performance issues.

5. Limited analytics and reporting capabilities

Access to robust analytics and reporting is necessary for making informed business decisions. About 52% of companies surveyed face challenges due to limited analytics capabilities, hindering their ability to gather insights and adapt strategies based on customer behavior data.

6. Lack of subscription management tools for effective recurring billing and invoicing

Effective recurring billing and invoicing are the backbone of a successful subscription model. Nearly half of the companies (48%) reported they lack appropriate subscription management software, which can result in inefficiencies and errors that can erode customer trust.

7. Limited ability to apply AI and machine learning to reduce involuntary churn from payment failure

Employing AI and machine learning to mitigate involuntary churn is a game-changer for modern subscription businesses. Yet 40% of organizations find their current tech stack inadequate for leveraging these advanced technologies, missing out on opportunities for proactive churn prediction and prevention.

8. Lack of automation in recurring billing platform

Automation in billing processes can dramatically reduce operational burden and error rates. Still, 39% of companies struggle with a lack of automation in their current systems, leading to increased manual intervention and inefficiencies.

Billing and payment optimization is more critical than many businesses may realize. Failed payments result in lost sales and erode customer confidence, eventually hurting customer lifetime value. For sustainable subscription growth, brands must invest in the right technology with the right partner to overcome these hurdles and drive faster, more profitable growth.