Myth: Subscription management is all about billing.
Fact: SaaS businesses live and breathe off of their customers. Subscriptions are at the heart of what they do, and billing is only one part of that. Good subscription management software recognizes this and acknowledges it in a way that allows businesses to integrate their tech stack, improve their collections process, and maximize efficiency.
With the right subscription management software, SaaS businesses not only change the way they handle their billing but also enjoy benefits that can be felt company-wide.
1. Billing management gets done in a fraction of the time
Subscription management software makes billing better for the business and the customer.
On the customer-facing end of the equation, the benefit is consistency. Invoices are on time and accurate. Gone are the rough tickmarks of human error. Never again will Jane Smith get an invoice addressed to Jan Smit.
According to Salesforce, 75% of customers view consistency as one of the most important elements of their overall experience with a business—to the point that they will seek new providers if it isn’t there. For the business that values a low churn rate, this is obviously not ideal.
Subscription management software also frees a significant amount of time up for your billing department. The more customers a subscription business has, the more impractical it becomes to handle invoices manually.
Billing is a job that can take weeks to do by hand, but the best subscription management software distills the work down to an afternoon—or even less. Not only is this vital for a recurring billing business’s scalability, but it also allows team members to focus on tasks that will have a higher impact for the business.
Automating manual processes has been shown to result in savings of up to nearly 50% per department that is impacted. By handling customer subscriptions and payment processing with recurring billing software, you make one change with many benefits for customers and the business alike.
2. Collections assurance is strengthened
A subscription management platform can also make it easier to collect late or outstanding invoices. Manual dunning can be a challenge, particularly when your billing department is already bogged down trying to get dozens of invoices out by hand.
Subscription management tools can enable:
- Automated credit card retries. Often, delinquent payments can be chalked up to a credit card issue—approximately 20% of Americans experience credit card over drafting. A customer may be overdrawn at the point that their card is billed. Even though they intended to maintain their subscription, they are booted because the payment registers as “missed.” Automated credit card retries address this issue—often without the customer ever needing to know there was a problem. This strategy has been shown to save up to 75% of revenue that would have otherwise been lost to churn.
- Credit card auto-updates. Credit cards expire every three to four years. When this happens, customers may not think or want to manually update their card with every vendor that has it on file. Many subscription management tools work with card providers to automatically update this information.
- Automated customer communications. Subscription management software also automates dunning communications. Email and even text notifications are sent directly to customers with outstanding invoices, providing them with clear instructions on how to put their accounts back in good standing. The dunning management module can even enable you to adjust your messaging in each round of reminders to convey the growing urgency.
- Improved reporting capabilities. A good subscription management system will also provide you with clear reporting on who owes what and for how long. These reports make it easier for your business to identify issues and craft a dunning management strategy that caters directly to its needs.
It’s easy for outstanding payments to result in involuntary churn—a phenomenon where customers who wish to maintain their subscription are kicked off. Up to 40% of churn is involuntary, leading to extensive revenue leakage.
Not only is this expensive—costing businesses up to 5% of their annual revenue—it’s also avoidable. A reliable subscription lifecycle management software addresses all of these concerns, retrieving revenue and maintaining customer subscriptions simultaneously.
3. Customers become empowered to take care of themselves
Subscription management software puts more power in the hands of your customers by providing them with a host of self-service options that make it easier to adjust and manage their subscriptions. Around 80% of customers attempt to handle any product issues or adjustments on their own before reaching out to the company, while roughly 70% of them prefer this to interacting with customer service.
Many subscription management services provide hosted pages that allow your business to effortlessly implement these portals. Not only does this benefit a significant portion of customers, but it also improves your overall customer experience framework.
When customers can handle simple problems themselves, it makes it easier for your business to handle the complicated ones. And, because your resources are being better used, you can provide a higher level of care to customers. Lower wait times and more personalized responses prompt results your customers will remember the next time they are asked to renew their contract.
4. Data management becomes simple and clean
Subscription management software improves data management by eliminating the need for manual re-entry. The manual data entry error rate is estimated to be around 1% — a seemingly insignificant number with the potential to produce significant consequences.
Subscription management technology can eliminate it entirely by integrating with the rest of your tech stack. Without integrations data is shared manually—sometimes verbally—between departments, creating an opportunity for mistakes to be made anytime someone needs information.
Through integration, data is accessible between departments. Integrations can be incorporated into everything from your CRM and ERP to your payment gateways. The subscription management software serves as a bridge, passing data seamlessly where it needs to go.
5. Reporting capabilities can go more in-depth
Aside from simply housing data, subscription management platforms also produce it in large, well-organized quantities. This information can be channeled into productive means through automatically generated dashboards that are easily accessed by the departments that need them.
Billing-generated data can help you better understand your customers for marketing purposes. It can facilitate usage-based information that is vital for product development, and provide calendar-based reports that indicate how much revenue will be coming in on a given day.
Through accessible reporting, each of your departments can access and implement the information they need in a way that is easy to understand and use.
Automated billing and invoicing processes are good to have in place. What full-scale subscription management systems provide is better: Collections assurance. Integrated data and reporting. Customer empowerment.
Subscriptions are about so much more than just invoices. They are the beating heart of any SaaS business.
A good subscription management platform is like a vascular system, funneling information everywhere it is needed in formats that are easy to access and understand.
For businesses that value efficiency, it’s vital.