There’s a lot that goes into subscription business success, from having a great offering to finding the right product-market fit to continually innovating to stay ahead of the competition. What’s easier to overlook—but crucial for subscription businesses—is having subscription management tools at your disposal.
But you don’t just want any set of tools—you want the right set of tools. The right set of tools will keep your business humming along, making it easier to acquire, engage, and retain subscribers, as well as manage all of your offerings. The wrong set of tools, however, will leave your business with blind spots at best—and have your team drowning in spreadsheets at worst.
It’s worth first considering all the capabilities you’ll need to run a successful subscription program first. A top-of-the-line subscription management toolbox will allow you to:
Create the best plans and promotions for your customers
Streamline your recurring billing
Deliver a seamless payment experience to your customers
Reduce involuntary churn, recovering revenue that would have otherwise been lost
Steer your business in the right direction through the use of subscription analytics
Seamlessly integrate the platform with your CRM
Let’s look at these one by one:
There are a number of subscription billing models including fixed recurring, quantity-based, and usage-based. Which one(s) is/are best for your business depends on a number of factors, from your target audience to your monetization strategy. To ensure maximum flexibility today and down the road, you need a subscription management platform that supports all of the most commonly used models.
You can acquire some subscribers by simply offering the right plan, but others will take a little more convincing. That’s where promotions come in. By offering a promotion, you can convince subscribers that are on the fence to give your subscription a chance—getting them to take that step is half the battle. Look for a subscription management platform that offers easily configurable free trials, gift card functionality, and coupon code functionality.
With a subscription business, you’re going to be billing your customers every month. If you don’t have the right subscription management platform in place, your finance and accounting teams could be forced to work a lot of overtime.
To prevent your staff from having to create manual workarounds and minimize the potential for mistakes, insist on a subscription system that has pre-built integrations with accounting and tax solutions.
You also want software that automates the quote-to-cash process to minimize the back-and-forth between your sales team and accounting department. The alternative is, again, a time-consuming process that needs to be completed over and over and comes with an increased risk of costly errors.
So, you’ve sent out all of your invoices and you’re feeling good… but you’re not out of the woods yet. There are eight steps involved in recurring payment processing, but the one that most often seems to trip up subscription businesses is the gateway.
Your choice of gateway impacts your acceptance rates and processing costs, among other things. But one gateway isn’t enough because a) the best gateway depends on your geolocation and product type and b) there is always the risk of an outage—which makes a backup gateway a necessity. To mitigate gateway risk, select a subscription billing platform that supports several gateways.
In addition to the behind-the-scenes aspects of recurring payment processing, you also want to create a seamless checkout experience for your customer. Look for a subscription management platform that offers pre-built checkout pages, customizable in a matter of seconds, and also lets you step up to a fully customizable checkout page.
The checkout process isn’t the only aspect of the payment experience that you should customize, though, as your customers also have payment method preferences. A lot of consumers, for example, are ditching traditional credit cards in favor of alternative payment options, such as PayPal, Apple Pay, and Venmo. The benefit of offering a large number of payment methods is likely to show up on the top line; Recurly merchants who accept payments via PayPal, for example, noticed an average revenue increase of 25%.
By offering a variety of payment methods, you make it easier to implement consumption-based billing models, which were traditionally used by utility companies but are spreading across many other industries these days. There are all types of possibilities in consumption-based billing, including prepayments, microtransactions, and taking away the need for your customers to make commitments—eliminating barriers to using your product/service.
With a first-rate subscription management platform, you will have to deal with fewer failed payments—but they won’t be completely eliminated. If your platform doesn’t have the tools to fight failed payments, your business is going to leave a lot of revenue on the table. You may be surprised to learn that over half of subscriber churn is due to failed transactions.
A subscription system needs a number of tools to minimize involuntary churn, including account updater functionality, dynamic retries guided by machine learning, and dunning. There is a lot that goes into revenue recovery, but the ROI is potentially massive. Recurly merchants, for example, see their involuntary churn rates drop from 6% to 1% on average.
Imagine that you’re spending more to acquire a customer than the average lifetime value of a customer. Your company would be in a lot of trouble. Without a solid subscription toolkit, you might not get that information until it’s too late.
But with a dashboard that gives you key subscription model metrics, you’ll be able to get insights into your company’s performance at a moment’s notice.
Look for a subscription billing platform that seamlessly integrates with a subscription analytics platform. Recurly, for example, integrates with ChartMogul, used by many SaaS businesses. In addition to having a dashboard that gives you a central source of information, you want to be able to export to a data warehouse, such as Snowflake.
In order to create an outstanding customer experience, you need to have a unified, easily accessible view of all of your customers’ data. CRM integration can help you get thereby enabling sales teams to quickly add subscription and one-time offerings to the right accounts. Recurly, for example, integrates with Salesforce.
Without CRM integration, you may have to write custom code to sync information between your CRM and subscription system—a non-starter for executives who have plenty of other projects on their plates.
It’s important to have all of the aforementioned features, but if you get them from a few different vendors, you may have a hard time keeping everything organized and integrated with the rest of your tech stack. With a complete subscription management platform, though, it will be easier to get up and running and extract value from your online subscription tools.
Recurly provides its merchants with all of the tools to effectively manage their subscription businesses, without the useless functionality that can weigh down a platform. With a typical time to launch of 46 days, you can get started in weeks instead of months. A long list of integration partners enables merchants to easily introduce Recurly into their tech stacks.
Our experience with merchants from several industries including SaaS, media & entertainment, education, and health care, among others, gives us the ability to understand the unique challenges facing your business.
Having the right subscription management tools is like having the right tools to build a house—you can build a house (business) with mediocre tools, but it’s going to take a lot longer. And the finished product is probably going to leave something to be desired. If you use a top-notch toolbox, on the other hand, you are almost certain to come out ahead—even if the upfront costs are a bit higher.