In the world of subscriptions, enterprise or B2B subscriptions are fundamentally different from individual consumer subscriptions.
Did you know that in 2020, 55% of B2B marketing budgets are allocated towards digital solutions for business growth? This means businesses are looking to personalize the buying experience more than ever.
Meeting the demands of your clients can be done by learning how to increase revenues through subscriptions. And this can be done without increasing overheads via automation. Sounds like a mouthful, but here’s how it’s done.
The Difference Between B2C and B2B Subscriptions
Many people may believe that subscription services are the same, no matter the intended audience, but this is not true.
B2B subscription services are fundamentally different. This is because the value of the sales agreement tends to be considerably higher than that of an individual consumer. What difference does that make?
Well, when your business is selling B2B subscriptions, you know that you need to showcase added value throughout the sales process. This can make the sales process last longer and in turn, means your business needs to work harder to get B2B customers. To subscribe is a longer and higher value subscription.
How To Increase Revenues Through Subscriptions
Generally, the reason you offer subscription-based services to your B2B customers is to generate revenue and increase sales. That is the ultimate goal.
B2B subscription-based models are about:
Cross-selling, upselling, and increasing customer retention.
Here’s what you need to consider:
- How will your B2B subscription model attract new clients?
- How can you segment your product or service into smaller pieces so that your customer can purchase at a more affordable, monthly fee?
- Which platform will you choose to help you achieve the ultimate subscription-based model?
The software you choose can make or break the subscription-based service that you decide to sell. Many subscription management systems come with the ability to do a lot yourself, keeping things in-house. You can automate certain processes in order to increase your revenue through your subscriptions.
For example, some software offers quoting systems allow you to streamline the process for your B2B customers. Thus making the time shorter between the quotation phase and purchase phase.
Let’s dive into how subscriptions can increase your B2B revenue.
1. Guided Subscription Processes that Maximize the Revenue Opportunity
Today’s next-generation sales technology empowers companies to use guided selling to create their subscription offerings.
By using rule-based logic based on leadership strategies, sales reps can create quotes that reflect the best combination of offerings and reflect executive strategies without needing to be babysat by a manager.
Teams can adapt to market reality and automatically create the best decisions based on pre-existing knowledge. This allows them to deliver quotes that maximize the revenue opportunity of subscriptions.
2. Simplified Sales Processes
Companies can increase revenues through subscriptions by creating a plan to use them as a vehicle to simplify and streamline their offerings.
Treating each subscription contract as separate wastes time with duplicate work and fails to maximize the revenue opportunity. Even personalized agreements often share a core set of offerings, terms, and conditions that lend themselves well to certain sales strategies and tactics.
Simplifying the repetitive parts of your subscription process allows you to plan to manage renewals, amendments, and upsells with ease. You can standardize package and payment terms, communicate new services, consolidate renewals–which makes it easier to deliver custom terms, pricing, and billing when necessary.
3. Improved Oversight of the Customer Lifecycle
Gone are the days where your sales team would have to manually check where your potential or current customer is sitting in the sales funnel.
With subscription management, you can gain complete oversight of your entire customer and prospect base. It means that you will be able to identify where in the lifecycle each customer sits, and ensure that you deliver a better customer experience.
Being able to analyze the customer lifecycle through your subscription management means you can easily cross-sell and upsell products to existing customers. And as a result, increase your revenue.
4. Complete Control of Master Data
In a B2B subscription model, you’ll find that your business can maintain complete control of the master data. This is the data that drives your system.
Why is that important?
B2B companies are able to use master data at the foundation of their subscription service to better adapt, track, and streamline how their users are behaving. Also, how each of their services or products are performing.
If you have access and control of the master data, you can make informed and educated decisions. These decisions would be made on the changes to the subscriptions that you sell, as opposed to playing a guessing game.
5. Identify Gaps in Your Offering
Subscription management is an essential part of understanding what gaps your business may not be filling.
Basically, your subscription service can identify a ‘roadmap’ of the purchases of your B2B customers. You’ll be able to see where customers drop off on the buying journey before they come full circle.
This means that a product or service that may sit at the end of your ‘purchase process’ may not be getting accessed by your customers.
Using your subscription service, you can develop a plan for your products based on usage data. You can also use your portfolio of services, and the financial performance of each stage of the subscription cycle to formulate a plan.
Subscriptions Increase Revenue Over Time
It’s necessary to mention that as businesses shift from a once-off, large sale to subscription-based sales, your business may see a short-term dip in revenue.
Subscriptions will, eventually, show an increase in revenue due to the nature of how the sale works. For example, the software you sell may retail for $100 once-off, but if you decide to move to a subscription-based model, you would charge $10 per month.
For the first few months, your revenue may seem smaller. But once your subscriber passes their 10th month, your revenue will be higher than it initially would’ve been.
You need to remain patient throughout the subscription sale process. By staying up to date with how your customers are behaving and adapting your program to fill where revenue is not performing. This is done over a longer period of time.
Maximizing your subscription management revenue is a process. This cannot be measured accurately if you don’t first have realistic goals in place before you start the journey.
Subscriptions and Increased Revenue are Like PB&J
Understanding how to increase revenues through subscriptions is but the first step in a long journey.
One of the absolute fundamental parts of a successful subscription-based sales model is choosing the right subscription management software. Remember, that driving subscriptions is effectively selling B2B memberships. So, your focus needs to be the nurturing of a long-term relationship with your B2B customer base.
The subscriptions you offer need to offer increased, added value for your B2B customers in order to get them to change their mindset, and invest in a ‘lifetime’ membership with your brand.
Now that we know you’re in the B2B market, head on over and read how to accelerate your B2B sales cycle, you won’t regret it!