If it seems like recurring revenue models are becoming more and more prevalent, that’s because they are: subscription businesses are growing 5x faster than the average company, making up a $7 trillion global industry.
With all the high-level strategic considerations involved in building a business, there isn’t much time to spend chasing down late payments creating a supportive billing infrastructure.
That’s where subscription management software comes in.
Subscription management software automatically handles recurring billing and payments processes, so subscription businesses don’t get overwhelmed by spreadsheets and leave money on the table.
A subscription management platform can help you by:
Automatically invoicing and billing your customers
Recovering revenue from subscribers who involuntarily churned
Recording plan upgrades, downgrades, and cancellations
Giving you the currency, gateway, and language capabilities you need for a global expansion
Helping you discover new revenue opportunities
That sounds all well and good, but what separates subscription software from the alternatives?
While you could elect to directly use payment gateways or accounting software to handle your recurring payment processing, they are unlikely to be adequate solutions for anyone but the tiniest company. Subscription management software has a much better chance of saving a subscription business time and money.
Okay, but how does it actually save time and money?
Let’s start with the time savings:
If a company uses subscription billing software, it no longer has to manually invoice and bill customers, adjust their subscription plans, and close the books. For a company with a diverse set of offerings, that can turn an overwhelmed finance and accounting department into one that has the time to take on longer-term projects that move the needle.
Then there are the financial savings—some easily quantifiable and others harder to measure:
Subscription management software gives companies the subscription model metrics they need to get insight into business performance, all in one place. This data can give subscription businesses an idea on how to analyze churn, potential new revenue streams, and upsell opportunities.
A more quantifiable benefit is a subscription billing software’s ability to recover revenue that would have otherwise been lost. More on that in a bit.
A first-rate subscription management platform has the capabilities to simplify all things recurring revenue for your company.
Your customer base is probably a diverse bunch with varying needs. Which means that you may need different plans and billing options to appeal to them. A subscription management platform lets you implement a number of subscription billing models, giving you the flexibility to experiment until you find the right combination.
If a prospect is on the fence about your subscription offering, a free trial is a good way to entice them to sign up. Look for subscription billing software with easily configurable trials, including the ability to specify the length of the trial period and determine whether payment information is required upfront.
Subscription software uses automated processes to prevent the loss of subscribers to involuntary churn, saving companies boatloads of money. Look for a vendor with a proven revenue recovery process that gets results.
What good is subscription management software if it doesn’t integrate with your other systems, from your CRM to the billing and accounting software you use daily? In that case, you would have to figure out manual workarounds, defeating the main purpose of implementing a subscription billing platform in the first place.
You could choose to rely on one gateway, but that’s a recipe for disaster if your business does any type of volume—gateway hiccups and outages happen. Additionally, there’s no single best gateway; the best gateway depends on product type and geolocation, so it will vary for each transaction. With that in mind, you should look for a subscription billing platform that supports multiple gateways.
At this point, you may be wondering:
Is subscription management software the answer for my company?
Assuming you have a subscription business, the answer is likely “yes.”
There are subscription businesses sprouting up in countless industries including SaaS, streaming media, consumer goods, healthcare, and education. The vast majority of them can benefit from the time and financial savings that come through the use of subscription billing software.
And as companies like Nicely Noted and Loot Crate have shown, your company’s ability to successfully add subscription offerings is only limited by its creativity. By being the first in your industry to sell a product/service on subscription—or the first to do so in an innovative, new ways—your company could move into a leadership position.
There are several subscription billing platforms out there, so how do you pick the right one?
In addition to insisting on the aforementioned capabilities, you should look for a solution that:
Is easy to get up-and-running. Time is money, so you don’t want to wait months—or a year—to start getting value from subscription software. Your company may be unable to afford another 6-12 months with a subpar solution. Look for a solution that can be ready to go in weeks.
Has a high projected ROI. Earlier, we mentioned that you should look for subscription management software with a revenue recovery process that gets results. To be more specific, you want to look for a vendor that can tell you how much it is recovering for its merchants vs. its fees. If that number represents a massive ROI, you could be on to a winner.
Is a good fit for a company in your industry. Let’s say you have a subscription ecommerce business in the shaving industry. A prospective vendor would ideally have experience with companies making sales in this niche online. But at the very least, look for a vendor that has worked with ecommerce, consumer goods businesses in the past.
Supports multiple gateways and has gateway failover. It’s not enough to support multiple gateways—you also want subscription management software that has gateway failover. This way, if your primary gateway faces a performance issue, you can continue processing payments.
Allows you to offer pause and postpone options. If a subscriber is thinking about canceling for whatever reason, you want to give them every chance to come back. By offering the option to pause or postpone their subscription, you keep them in your system—as opposed to losing them forever.
For a more in-depth look at the factors that go into choosing a subscription billing platform, check out our step-by-step guide on making your selection.
By providing all of the features you need, without the bloat that you don’t, Recurly stands above the other subscription management platforms on the market.
To start, the average Recurly customer gets up-and-running in 46 days. With our Learning Paths onboarding series, all of your staff can start getting value from the platform soon after that. And as a lightweight solution, Recurly is easy to integrate with your existing tech stack.
Once you get going, you’ll be pleased to notice that you have all of the important features including:
Easily configurable free trials
Pause and postpone functionality
Gateway routing and failover
Revenue recovery with 700% ROI
Recurly powers subscription success for over 2,000 companies in a variety of industries with a multitude of business models, so in addition to all of the features, there’s a good chance that Recurly has experience that’s relevant to your company.
What can subscription management software do for my company?
By using subscription management software, you can automate the recurring billing process. This will help save your finance and accounting teams a lot of time, enable you to recover revenue that would have otherwise been lost, and give you insights into the trends that are driving your business.
Should I build my own subscription management software or buy a solution?
While it’s possible to create a homegrown subscription billing solution, it’s easy to underestimate how difficult it is to build and maintain a successful platform. You’ll need to create a revenue recovery process that gets results, allow for easily configurable free trials, automate the testing of pricing and plan packages, build gateway failover logic, and much more. By going with a proven subscription management software, you are likely to ultimately get a better solution at a lower cost.
Is subscription management software easy to use?
It depends. Some subscription billing platforms have a cumbersome UI, making it tough to derive value from the solution. But there are also platforms, like Recurly’s, that are easy to implement and user-friendly, while also being powerful enough to integrate with the rest of your tech stack.