Subscription-based business models bring great revenue but are complex to maintain. It’s too easy for businesses to waste time and resources with poor subscription management. Especially in the current market, no business can afford lost revenue from incorrect pricing, missed chances for upselling, and more.
Here are the top 10 problems in your subscription process and how to solve them.
1. A Lack of CPQ
Maximizing revenue from your subscription management processes requires next-generation CPQ technology. By building accurate quotes for subscription plans, you can ensure that you get the most revenue possible for the entire duration of the contract.
Solution: DealHub CPQ empowers companies to streamline their subscription quoting. It creates a unified sales workflow that ensures no upselling, cross-selling, or bundling opportunities are missed, In addition, its rule-based logic ensures companies standardize the terms and conditions offered to similar prospects and customers. And with automated discounting approvals, sales leadership can protect margins while eliminating manual approval processes that slow reps down.
2. Managing Co-termed Subscriptions
A solution that can’t adapt to customer growth will be quickly abandoned. Customers may change their subscription level at any time and want zero interruptions or hassle from confused billing. SaaS companies that can’t keep up may be hindered in their own growth.
Solution: DealHub CPQ’s subscription management makes co-terming easy. Instead of having multiple licenses, each with their own payment terms and periods, across a single customer account, DealHub automatically unifies billing into a single invoice.
Companies can get all of the benefits of long-term plans and bulk license discounting, but without the headache that comes with trying to either pay for everything individually, or manually reconcile their payments.
3. Payments with Flexible Billing Frequency
SaaS customers may not get enough value from your product to justify a flat-rate monthly billing cycle. And your business may lose revenue if customers far exceed the norm for a flat rate.
Solution: Opt for flexible billing that use metrics like gigabytes or hours used to generate an invoice. Invest in an automated billing platform that can handle a random billing frequency, as handling this model manually will be impossible at even minimal scale.
4. Trial, Discounts, and Promotions Management
Offering trials, discounts, and promotions bring in new and (more importantly) repeat business. But because these are most effective when they are time-sensitive, companies reliant on manual processes will be limited by the bandwidth of their human staff.
Solution: Automating trials, discounts, and promotions through a quality subscription billing service not only manages these pricing changes but also tracks information relevant to future marketing campaigns.
5. Getting Pricing Wrong
Unlike physical goods, which can be priced using costs of materials and labor, software and SaaS are much harder to price accurately. Pricing too high or low both lose business.
Solution: If you don’t already, offer subscription tiers with more features available at higher costs. Additionally, a carefully calculated value metric helps you assign fair monetary value to your products. Paired with dynamic adjustments in billing plans, this metric lets you create a pricing plan that customers will find reasonable for the value they receive for their subscription level.
6. Missing Cross-selling, Upselling, and Bundling Opportunities
Sales now happen at many stages in the buying journey. Cross-selling, upselling, and bundling are more efficient sources of revenue than acquiring new leads and customers. But many digital sales platforms either can’t do this additional selling at all or are too generic to close many deals.
Solution: Avoid broad cross-selling, upselling, and bundling (like “do you want to super-size your meal today?”). Invest in software that helps you know your audience(s) through data, build out buyer personas and their likely problems, and create “smart” cross/upselling or bundling offers that respond to customers’ previous purchases or carts.
7. Secure Payments
Secure payments are a must-have in 2020. Customers do not tolerate financial risks, and the poor word-of-mouth can have lasting impact on business.
Solution: Select an automated billing platform with a pristine record of exceeding security expectations. It may take more time and money, but customers will thank you with continued business.
8. Failed and Missed Payments Transaction Management
Manually monitoring large customer lists for missed or failed payments and contacting customers wastes resources and is impossible at scale. Failing to contact customers promptly after failed or missed payments risks churn.
Solution: Select an automated billing solution that also includes a dunning process, or a workflow for automatically contacting customers who have missed a payment. You can configure the messages that will automatically send to customers using a yes/no tree for payments made (or missing). Contact is consistent and predictably paced, and it doesn’t draw on your staff resources.
9. Multi-currency and Language Support
Your customers are global, but your company (and your bank) has a primary language and currency. Billing platforms that don’t offer automatic, accurate conversions between different currencies and translations of bills will disappoint potential customers and decrease sales.
Solution: Invest in a billing system that can understand multiple languages and multiple currencies and that adapts to current exchange rates, which shift over time.
10. Churn Management
Even satisfied customers are equally likely to investigate competitors as they are to stay on their current solution, especially when subscriptions are about to end.
Solution: Particularly in SaaS, purchase decisions often happen more than a year in advance. Stay engaged with customers by investing in tools that will regularly contact customers and that will automatically notify your staff if a customer becomes “at-risk” (for example, their credit card on file is going to expire).