With rapid digitalization, subscription-based business models have become more mainstream. Companies now have to manage various stages of a customer’s lifecycle, such as signing up, upgrading and downgrading, issuing credits, and unsubscribing. Needless to say, doing these tasks manually is prone to errors.
Therefore, companies require a robust platform for managing subscriptions and recurring billing to manage these tasks efficiently and offer the best customer support.
What is subscription billing?
Subscription billing is a type of income in which a company establishes a relationship with the customer based on scheduled billing (i.e., once a month, annually, etc.). It’s a recurring process, and its most common applications include Software-as-a-Service (SaaS) and memberships on platforms such as Amazon Prime, the New York Times, and Netflix. It is applicable to both B2B and B2C services.
You need a proper subscription billing system for all these services to function properly. This system will provide flexibility to your work, offers recurring revenue, and pricing through subscriptions draws in more customers. If you’re managing a subscription-based business, ensure using a billing tool has all the functions you need to make work efficient and accurate. Here’s what you need to know about such software and how to shortlist one:
Choose a platform that supports subscription billing
The primary function of every subscription billing system is to send bills to customers and collect payments automatically. Despite how easy it can seem, there are several difficulties in implementation. So you must use a subscription management platform that satisfies your needs because there are various billing conditions. It must support regular billing plans as well as one-time billing.
There are different billing models to suit various subscription business models. Businesses must still choose a billing type (i.e., anniversary or calendar). Businesses that employ anniversary billing charge clients on the same day of the month that they first signed up. In calendar billing, clients are charged on a set day regardless of when their purchases were made.
Ensure a variety of payment methods are available
This is especially appropriate for companies that demand customers renew their subscriptions through recurring billing. To accomplish this, the subscription billing system should accept various payment methods, such as SEPA Direct Debit, ACH payments, PayPal, Apple Pay, and Amazon Pay, while also accepting offline payment options like checks and cash.
Ensure that the billing software also includes a payment reminder feature for subscribers. This will ensure better customer satisfaction and experience as well as help you get your payments on time.
Ensure the system includes subscription management
Managing a client’s lifecycle is essential to delivering a good customer experience. Applications for managing subscriptions must allow clients complete flexibility over how they consume your product or service. The billing model should be able to fulfill requests like stopping and resuming subscriptions and offering reactivation. Consider the following features:
- Easy upgrades and downgrades
- Pause as well as cancel
Choose a system that can be integrated with different platforms
Your subscription billing system should interface with other programs in addition to accounting and payment programs. Following are a few examples.
- Customer relationship management (CRM) integration will support your company’s sales management. It is easier to customize promotions once your CRM team has access to consumer subscription data. This assists in increasing sales. Additionally, it syncs customer information across all of your channels. You should be able to change client information, such as email addresses and contacts, from your billing platform
- Your customers should be able to track subscriptions and payments online with the help of a customer portal. As a result, you won’t have to send your clients invoices. Customers can manage their subscriptions and payments with ease.
Collect and use analytics
Reports are essential for gaining knowledge of a business’s financial situation and facilitating decision-makers. The reporting features of your tool should enable you to compute the revenue metrics that make sense and show trends and insights that can influence your business decisions. For subscription businesses, revenue statistics such as monthly recurring revenue, average revenue per user, lifetime value, and churn rate are common key performance indicators (KPIs).
Ensure that the data you collect is accurate as well as detailed. The precision of the metrics monitored aids in enhancing the long-term estimates of your company. Your system must integrate with analytics tools like Google Analytics to accomplish this.
A simple yet adaptable subscription billing system should be able to handle a variety of tasks. The above factors should be considered while searching for an appropriate subscription management software. When used properly, a tool can be adaptable enough to handle complicated requirements and help businesses deliver a good client experience. Before making a purchase, always avail any free trials available to get an idea of the software and how it fits your needs. This will help you determine whether the software is ideal for your business or not.