Choosing the Right Subscription Management System Could Save You Time, Money, and Customers
Oct 9 2019
Running a subscription business is a lot of work. Every month you need to make sure recurring payments are being processed by your payment gateway and accepted by various merchant accounts. If you miss out on a one-time payment or recurring charge, that’s money you might not get back.
That’s where a subscription management service can help. A subscription management service streamlines these billing procedures so you always know how and when your payments will be processed. Every point along the customer lifecycle—whether it’s an initial purchase, a monthly charge, or change in a customer’s plan—is handled automatically.
Automating these processes creates a smooth customer experience and gives you peace of mind. Instead of worrying about administrative payment tasks, you can get back to what’s really important—growing your business.
Subscription management is the process of handling payments along every step of the customer lifestyle. While these payments can be handled manually through a payment gateway (the service you use to authorize payments), it’s more reliable and time-effective to automate this work with a subscription management service.
What subscription management systems can do for your business
The core function of subscription management systems is to schedule and accept recurring monthly payments. With that said, these tools offer additional payment features that can help subscription companies reach global customers, monitor their business performance, and more. Here are a few key ways these systems benefit subscription companies.
Subscription management services bring together several payment and billing functions.
Subscription management services automate your recurring payments and generate invoices for each individual transaction. This functionality saves time that would otherwise be spent manually generating each invoice, inputting data into a payment processor, and scheduling a payment. Every transaction is also automatically tracked and stored for future reference, making analyzing trends and reporting on them much simpler.
Collect foreign currency
Many subscription services work with different payment gateways. Working with several gateways ensure that regardless of the geographic location of your customers, you’ll always be able to take payment. Being able to use multiple payment gateways also makes it easier to provide a seamless customer experience for any customer. Focusing on only one payment gateway would cause unnecessary and troublesome bottlenecks in your process.
Most subscription management software will provide reporting and analytics on your payments as a part of their service. This makes tracking key metrics like LTV, MRR, and churn easier, taking away the potential for human error or bandwidth constraints. Whether you’re an ecommerce subscription box or a B2B software app, understanding these metrics helps you evaluate your pricing and make better decisions to support the growth of your business.
Sends transactional emails
While not every service will offer this feature, some subscription management tools help you send automated billing emails to customers. Automating these email receipts, dunning emails, and retention campaigns save you time and ensure the customer is always up-to-date with correct billing information.
Sending these emails through your subscription management software can potentially cut down on your marketing costs and prevent you from having to purchase an email service provider to handle these processes. It also decreases the potential for integration or data-sharing issues by keeping these emails under one tool.
Some subscription management services like FuseBill offer the ability to send coupons and discounts directly to customers. These discounts can help you retain more customers by making them an enticing offer to stay. Depending on the management service you’re using, these discounts can also boost acquisition of leads in your marketing funnel.
Now that you know how a subscription management service can help you streamline your billing processes, it’s time to figure out which one is the best fit for your business.
What to look for in a subscription management service
The right subscription management software will be the one that fits your specific needs. A small startup offering a single-tiered monthly subscription won’t need the same kind of functionality as a multi-tiered enterprise solution. Deciding on which management tool to use is dependent on a number of factors, such as your pricing strategy, your technology stack, and your customer base.
With so many services in the market and more popping up every day, choosing a subscription management tool can feel overwhelming. Stay on track and find the best tool for your company by considering the following five factors when reviewing any service.
Easy integration with your tech stack
Drastic changes to your technology stack are never a good idea, so it’s paramount that your subscription management service integrates with the existing technology in your company’s tech stack. It might seem like this is easier for small companies with fewer services in use. However, even small companies must factor in how their technology will grow and what integrations they’ll need as the company scales.
Larger companies, on the other hand, will likely encounter issues with technical debt and complex systems that require more specific features from a new tool. That said, they’ll also have the resources to work through more complicated payment processes in house.
Payment gateways for target customers
Know your buyer personas inside and out. It’s important to understand their preferences, their interests, and their location when creating personas. If a segment of your customer base is located in Asia, for example, you’ll need a subscription management software able to process payments in that currency. The same can be said if you’re thinking about expanding into new markets in the future. Your tools need to grow with the demands of your company.
When you’re investigating a new service, check out its own integrations page. If you don’t see payment gateways listed that support your customer locations, that’s an immediate red flag.
Accessible and insightful reports
What metrics are the most valuable for your business? Does your subscription management service report on them? The software you choose should be able to deliver insights on your business that help you grow. If you want to track your CAC payback period or how your ARPU is changing, for example, look for a subscription management service that reports on these metrics.
It’s also important to review how these reports appear visually. Gathering information on these metrics is much more difficult if the reports are confusing or incomplete.
Whenever you look for new tools to support your business, it’s important to see what customers of those tools say about them before you commit to making a purchase. With that said, read reviews of subscription management services so you’re able to make an informed purchase. Just make sure you’re looking at these reviews in aggregate—5 negative reviews out of 20 is much more telling than 5 out of 500.
Helps you get results
Setting goals for your company growth is important. Every piece of software you use should contribute something of value toward achieving these goals. If your subscription management service doesn’t help your company grow, then why have it in the first place? When you integrate a new tool into your tech stack, it needs to add value.
If your reports are inaccurate, or the integration to your tech stack requires a lot of ongoing maintenance, there’s no point in using the service.
Find the right subscription management tool for you
Subscriptions management is a vital part of every SaaS company’s business model. If you’re not able to facilitate recurring billing payments for your company, that will hurt your relationship with customers and drive down revenue.
A service that fits your specific requirements will help save time, money, and customers. Using the information in this guide, we hope it’s easy to figure out exactly why subscription management service works best for you!
By Patrick Campbell
Founder & CEO of ProfitWell, the software for helping subscription companies with their monetization and retention strategies, as well as providing free turnkey subscription financial metrics for over 20,000 companies. Prior to ProfitWell Patrick led Strategic Initiatives for Boston-based Gemvara and was an Economist at Google and the US Intelligence community.