Subscription Billing

What is Pricing Localization and How to Do It with Your Subscription Billing Platform

Erica Cosentino | January 20, 2022

There are a lot of benefits to running a SaaS business over a traditional retail online store: it’s one of the best business models for companies looking to expand internationally. Without needing to sort out the logistics of getting a physical product from point A to point B, the whole world is your potential customer.

But how are you charging those international customers: in your country’s currency, or theirs? Are you adjusting the price itself to scale lower or higher, depending on where the customer is located?

These considerations have to do with pricing localization—a pricing strategy that can elevate the customer experience and help your subscription services become more profitable. Let’s dive into the ‘what, why, and how’ of using a subscription billing solution to localize your SaaS business’s pricing.

Cosmetic vs. market localization and the benefits of each

In short, pricing localization is about changing your pricing in different markets when doing business abroad.

It really can make a difference—up to 50% of potential customers will abandon an online purchase if forced to pay in a different currency. So, localizing your subscription pricing to some degree can help your SaaS business perform better in foreign markets.

There are two different ways you could approach your localization strategy:

  • Cosmetic pricing localization is the conversion of your currency to the local currency. So, if your product costs US$99/month, and a potential customer in London visits your site to see your subscription pricing options, they see the equivalent of that $99/month in GBP.
  • Market pricing localization involves not just changing the currency, but the actual base price depending on what each region is willing to pay. Market saturation in each region will play a big part in the final number. Let’s go back to that local subscription price of $99/month. Say you have a high number of competitors in the U.K.—rather than simply converting dollars to pounds, you’d establish a new, slightly lower price for your British subscribers to compete in that saturated market. Conversely, if you have a low number of competitors in Germany, rather than converting $99/month to euros, you could establish a new, slightly higher German price since those subscribers would have fewer options to choose from.

Certainly, more work needs to go into establishing a market localization strategy: you may need to run pricing sensitivity tests in each market to determine the base price and have a team member stay on top of any changes in pricing trends.

Price Intelligently analyzed nearly 500 subscription businesses and found those with a greater focus on localization were growing up to 30% faster than those that weren’t making the effort. So, for the startup or mid-market subscription business that doesn’t have the resources available for true market localization, cosmetic localization is a simple and very effective place to start.

Localize pricing easily with your subscription billing platform

Of course, to effectively localize your pricing at any level, you need to work with the right tools for the job. As part of your fintech and subscription management ecosystem, you’ll want to ensure you have:

  • robust subscription billing software that supports multiple currencies,
  • international taxation software, and
  • payment gateways that accept the same currencies you bill in.

Working with an automated recurring billing solution is non-negotiable when doing business abroad. The subscription billing process is tedious enough to manage by hand when you’re only operating in your home country. Throw in multiple currencies and differing tax rates and regulations, and you’ve got a recipe for disaster caused by human error.

Here’s how to use your recurring billing platform to localize pricing and stay on top of international payment processing.

1. Add pricing in foreign currencies to your subscription catalog

Within subscription billing systems, your catalog is where you set up your products and plans and the pricing for each.

Prior to adding a new currency, you’ll have to do the appropriate research. If you’re only chasing cosmetic localization, it’s simply a matter of finding an exchange rate you’re comfortable with. Meanwhile, if you’re after true market pricing localization, you’ll want to have someone research local competitors and other market considerations to find an appropriate price point for your subscription services in each region.

Finally, you can add the foreign currency pricing into your recurring billing software’s product catalog so international customers can be charged in their local currency.

2. Create registration pages for each region

Now you need a way for customers to see this localized pricing and sign up for subscription plans. You can take advantage of hosted registration pages within your subscription billing software to do this.

Create a version for each region you’ll be doing business in. Display pricing on each registration page in the region’s currency and consider translating the page copy to the local language, as well.

“Beyond revenue, localizing your pricing also helps you connect with your customers more, especially if you’re localizing your site copy and software as well with different languages,” writes Patrick Campbell of Profitwell. “Prospects like to buy from people they know or feel a connection to.”

3. Connect integrations to facilitate taxation and payment collection

Then, there are taxes and other red tape issues that come with accepting recurring payments internationally. And of course, you want to make sure your payment gateway accepts the relevant currencies of all the regions in which you do business.

Integrating your subscription billing platform with a global commerce solution covers both bases for you. It automates the collection and remittance of the appropriate local taxes and acts as a payment gateway to collect payments in the markets’ local currencies.

Pricing localization and international scale go hand-in-hand

The best subscription billing software solution won’t just simplify your billing operations—it’ll act as a holistic subscription management platform that enables your business to rapidly scale. And given the fact that up to 30% of the average public SaaS business’s revenue comes from outside North America, you’ll want recurring billing software that helps you grow internationally with ease.

Stax Bill’s recurring billing system enables your subscription business to localize pricing, either at a cosmetic level or a true market level. And its integration with global seller solution Digital River both provides an international payment gateway solution and takes care of the red tape issues of doing business abroad.

The more localized you can make the software buying experience for out-of-country customers, the higher you’re elevating the customer experience, and the more likely those customers are to stay with you for the long term.


Written by:

Erica Cosentino
Erica Cosentino
Marketing Manager, Stax Bill

Erica is Stax Bill’s marketing manager. With a background in film production and content marketing, she enjoys the challenge of bringing the SaaS world to life – and making the topic of recurring billing fun. When she’s not at Stax Bill, Erica is borderline obsessed with travel (she’s been to 20 different countries) and loves learning new languages, speaking Italian, Spanish, and French to varying degrees of fluency.