It’s easy to put billing in a box, and file that box under “finance.”
Invoices go out. Money comes in. Rinse, repeat.
But in the broader context of the customer journey, there’s a lot more to it than that. An invoice goes out before the customer even receives their first month of service. Over time, those monthly invoices will have significantly more contact with the customer than any other division of your business.
Billing is a customer-facing division of your business that can tank the consumer journey or enhance it, depending on the decisions you make. The right subscription management solution provides the tools you need to improve experiences and collect more revenue as a result.
Billing and the customer journey
Meet Jill. Jill is in the earliest stages of her customer journey with Company X—an IoT subscription model SaaS service that uses legacy billing technology. Company X deals both in hardware and software, which means their customers’ bills can be a little complex sometimes.
Of course, Jill doesn’t know that. Yet. As far as customer engagement goes, Jill is as excited and eager as it gets. She has a need. She believes Company X has the solution. And they do. Until the first bill arrives…
…three days later than she expected. Addressed to Joll—that’s not even a name, she thinks. The fact that her bill reads like a word search—loaded with vague line items—distracts her from the typo. The total looks like it could be right, although it’s very hard to be sure. She did have a one-time charge to get her hardware, and of course, there should also be a charge for her subscription.
Instead, the bill reads like she has opened and canceled multiple subscriptions. It’s a head-scratcher.
In short, Company X hasn’t put its best customer experience foot forward. Jill might let it slide one or two times, but her customer engagement levels are no longer anything to brag about.
It’s not that Company X took the wind out of Jill’s sails on purpose. She simply experienced the natural drag of inflexible billing for a subscription business. If everything had gone right, she probably wouldn’t have given her invoice a second thought.
She wouldn’t call up a peer at another company. You’ll never guess how error-free the invoices at Company X are. Come over and look at this. Bring the CEO. She’d simply still have the enthusiasm she felt at the start of her consumer journey. Instead, the business now has a strike against it, and there’s no reason to think anything will improve in the future.
Stability is crucial to the subscription model. A subscription management service that easily handles complex billing improves customer journeys, thereby increasing the odds of repeat purchases and overall retention.
Tips for optimizing the customer journey with your billing software
So it’s clear that legacy technology is a hindrance both for the customer and the business. But how does subscription management software make the difference? By understanding the scope of this technology, you can use it to improve customer outcomes, and consequently boost revenue.
1. Give customers autonomy
Good subscription management services allow customers to handle many of their own needs manually, without the need to contact customer services. If they want to upgrade, downgrade, or cancel their account, they don’t need to hop on the phone and maybe miss a few of their kids’ birthdays while they wait on hold.
A simple cancelation or plan change can be handled in seconds. According to the Harvard Business Review, 81% of customers try to figure an issue out on their own before getting help.
Giving customers a degree of self-sufficiency is an important element of a successful subscription model. At the most fundamental level, it elements a barrier. Jill doesn’t want to spend forty minutes on the phone asking a simple question about her bill. She wants to investigate the issue on her own and then move on with her life.
But, what if Jill has a bigger question? Then she might want to reach out to customer service. Around 40% of people eventually wind up calling customer service even with self-service options in place. If everyone and their cat are waiting to speak to someone to simply update their credit card number, it will take a while to get through.
Subscription businesses can combine their customer service with self-service and live help chats to reduce wait times and streamline the entire experience.
2. Automate billing and billing adjacent tasks
Subscription management software automates consistency and stability in billing while also addressing various billing-adjacent tasks. A recent consumer survey revealed that customers prefer businesses that can deliver consistency up to thirty percent more than those that cannot.
Having your bills out at the same time every month is what customers expect. It helps them better manage their finances, and it eliminates unpredictability from the equation.
Subscription services can apply that same level of consistency to factors like dunning or credit card retries.
Handling a missed payment manually is tough for everyone. The customer—Tom, let’s call him—wants to stick around. In fact, Tom doesn’t even realize he missed his payment. He recently changed his credit cards and forgot to update his information. Actually, he wanted to but he put it off because Company X didn’t have a self-service portal…
Anyway, Tom’s card didn’t clear. His subscription gets canceled immediately. Company X doesn’t have the time or resources to reach out for this payment; its collections process is manual-heavy. Tom could call customer service, update his information and get the ball rolling again.
Except he doesn’t. He goes to Company Y, signs up through its self-service portal, and lives happily ever after.
Tom was a victim of involuntary churn—a phenomenon that could account for up to 40% of your churn figures. It’s expensive and unnecessary.
A good subscription management platform can:
- automate dunning,
- retry credit cards without the customer ever being the wiser, and
- send out emails automatically to let Tom know what he needs to do to correct the mistake.
3. Accurately log usage-based charges
Usage-based charging, or meter billing, is growing significantly in popularity. In an age where people have an average of twelve active subscriptions (seventeen for millennials) the idea of only paying for what you use has a natural appeal.
Even a very attentive subscription service can’t hope to handle this accurately by hand. Naturally, any mistake in this department would be viewed with extreme prejudice.
It doesn’t have to be this way. Subscription management software automates meter-based billing, providing convenience to the customer, and more options for the business.
4. Use integrations to bolster international business
The United States accounts for just 5% of the global population. The math on this one is pretty simple. If you’re only equipped or prepared to do business in North America, you’re neglecting most of the world.
A study—which wasn’t titled “unsurprising facts we could have guessed ourselves” but maybe should have been—revealed that 92.2% of shoppers prefer buying things in their native currency. Because, otherwise, calculating the exact cost can get a bit tricky.
By integrating with a payment gateway that handles multiple currencies, you can make it much easier for your subscription-based services to go international.
The subscription economy is global. There’s no sense in letting insufficient tech hold you back from most of the world.
Billing as RevOps
Billing is a financial function that ties directly into revenue operations. It’s one of the first steps in the customer journey, and in many ways, it’s the most consistent. The bills keep coming, long after your sales and implementation divisions have finished up with an account.
Of course, you want your billing department to deliver a level of service that keeps people around. And the better the experience, the more open your customers will be for account upgrades, or even word-of-mouth recommendations.
Billing in the modern era naturally connects with so many other elements of your business. Good subscription management services allow you to nurture and bolster those connections in a way that benefits everyone.