The first workweek of a new year is a weird one, isn’t it? There’s an internal battle between the post-holiday overindulgence-induced sluggishness and the renewed energy that comes after an annual vow to be a better person.
Not for you, though!
While your competitors are busy getting back into the swing of things, you’re busy finalizing your 2024 promotions schedule to make this the best year yet.
But apart from briefing your team on the details, prepping your marketing copy, and the like, have you confirmed that your subscription management software can handle an influx of new customers?
It would be a nightmare if your promotions, which appeared flawlessly executed from the outside, were let down by the software that manages customer subscriptions behind the scenes.
In particular, check if your SaaS subscription management software can:
Let’s say new customers that subscribe during your promotion will enjoy a discount. This is a pretty standard promotion structure, but registering discounted customer subscriptions can prove a challenge if you’re using legacy subscription management software.
That’s because you might need to:
- duplicate an existing subscription plan in your software, then
- modify the pricing of the duplicated plan to reflect the discount.
Or follow some other messy workaround.
If your business offers a variety of subscription plans and regularly runs promotions, (repeatedly) duplicating your plans in this manner will leave you with a bloated and unwieldy subscription catalog over the long term. Confusing workarounds also have a tendency to skew your monthly or annual reporting.
With its versatile catalog, however, modern subscription management software avoids this entire mess.
Once you’ve set up your plans’ base prices in such software, you can flexibly override these prices for specific customers. You won’t have to create entirely new plans just to charge some customers a different price for the same service.
From a customer point of view, the end result is the same regardless of the type of software you use to manage discounted subscriptions: customers that signed up during the promotional period will pay a reduced price, while all other customers pay the regular price.
But the difference is that you keep your software’s subscription catalog clean, lean, and easy to navigate.
Perhaps your promotion allows customers to enjoy a discount for a limited time, after which their bill reverts to the regular price. In this case, you’d need to deactivate the discount when the discount period ends.
Here, hazards abound if you were going to remove the discount manually.
- Accidentally end your discount too early and you may incur ire, chargebacks, or even cancelations from unhappy customers.
- Alternatively, forget to turn off your discount and you’d leak recurring revenue with every passing day.
- Even if you have committed the correct date of discount removal to memory, going into your software to do so can be a pain.
So why not just let your subscription management software handle things for you?
When creating a discount in modern subscription management software, you’ll get to state the discount duration. Options include forever (i.e., the life of the subscription), or a fixed number of months or years.
Your subscription management software will keep track of D-Day and automatically end the discount on that day for you—not a day earlier or later.
On your end, you’d just need to give your customers an advance reminder that their discount will be lapsing. This way, they won’t get a rude shock when they receive their next invoice.
If any of your promotions extend to existing customers, they’d have to submit their request to customer support in order to take advantage of it. A support representative then updates their plan.
But imagine the burden on customer support if you have hundreds—or even thousands—of customers, all clamoring to grab a promotional deal by the deadline. Your team might be upgrading and downgrading customers round the clock for days!
While you could set up a war room with unlimited coffee for your support team during the promotional period, the better alternative is to let customers update their subscriptions themselves.
Using comprehensive subscription management software, it’s easy to create white-labeled offerings pages or self-service portals for customers to upgrade or downgrade themselves 24/7. You’ll just need to add your discounted plans to the offerings page and provide clear instructions on where customers can go to claim the deal.
Such a self-service option not only frees up your team to attend to more complex support requests, but also allows customers to get instant access to their new plan.
While watching your subscriber growth spike during the promotional period grants an instant dopamine hit, don’t be too hasty to call your campaign a success.
That’s because you may not make enough revenue to justify the effort if your new customers churn out too quickly.
To determine the profitability of your promotion, track the lifecycles of the customers you’ve acquired through it. The trick is to use your subscription management software to segment customers by activation cohort—in other words, the months in which they became active users.
For a New Year’s promotion, you can monitor the sales data for your January activation cohort to see if—and when—these customers are:
- upgrading their subscriptions, as reflected in increases in expansion monthly recurring revenue (MRR),
- downgrading their subscriptions, as seen from increases in contraction MRR, or
- just canceling altogether, as observed from your churn rate.
Such data can shed light on how much subscription revenue your customers are contributing to your bottom line, plus whether they are a good fit for your product.
For example, if many customers in the January activation cohort churned after their discount expired, this could suggest they don’t find your subscription service worth paying full price for. You can then dig deeper to learn the reasons for this and how you could increase customer retention.
Does your subscription management platform check off all four of the above boxes? If it doesn’t, there’s still time to invest in a more sophisticated option while you count down to the launch of each 2024 promotion.
While legacy setups could work to some extent, making them do what you need them to do for your promotions may be more trouble than it’s worth, if even possible at all.
On the other hand, a modern subscription management solution comprehensively—and effortlessly—provides the backend support you’ll need for onboarding your new customers and maximizing their customer lifetime value after that.
Don’t start your next promotion—much less the new year—without it!