Subscription management can be defined as the way in which subscription software companies handle the entire client life cycle from start to end.
However, if that process isn’t well-managed, the end may come sooner rather than later. Imagine being a customer who is:
- receiving late or inaccurate invoices,
- having no feeling of autonomy, or
- getting no support in using the product.
You’d probably cancel that subscription pretty quickly, wouldn’t you?
A strong subscription management process, on the other hand, is an important behind-the-scenes element of the customer experience (CX). It allows your business to develop a relationship with its customers and ultimately drive growth.
After all, customers that have positive experiences with a business are willing to spend up to 140% more on future transactions. If you’re looking for ways to maximize customer lifetime value, this is it!
To that end, here are five of our best tips for managing subscriptions to improve your CX and increase business growth with the help of a modern subscription management platform.
1. Put The Customer in Control.
By and large, self-service is users’ first choice when it comes to managing their customer subscriptions. In fact, 70% of customers expect a business’s website to include a self-service portal, and 40% of customers prefer self-service over speaking with a company representative.
By implementing a self-service portal, you can empower existing customers to manage subscriptions they already have. Whether it’s to:
- upgrade or downgrade their subscription plan,
- update billing details, or
- close their account altogether.
Giving customers a sense of control over their subscriptions creates a better experience.
A registration page works similarly for someone wanting to become a paying customer for the first time. They can log on at any time, select the plan options that work best for them, and begin using your product without ever having to contact a sales rep.
“You want every interaction to be a ‘Wow!’ moment, so your customer thinks, ‘I love this product! I love this company!’,” writes customer success leader Lynn Tsoflias. “A great self-service model drives customer engagement and product adoption in a scalable way by accomplishing exactly that.”
2. Set Customers Up for Success.
The best time to start educating a new customer on your software product is ASAP. Immediately after signup is the first and one of the largest opportunities for customers to churn. The sooner you can help them feel confident in your product and see its value, the more likely they are to stay with you in the long term.
Perhaps you’ll offer:
- a how-to video or article series for smaller accounts to learn about your product at their own pace, and/or
- a series of training calls with a dedicated customer success representative to help the customer get off the ground sooner.
Whether you offer self-help resources, training from a real person, or a combination of both, providing ongoing support and maintaining a relationship with the customer are important facets of subscription management that can ultimately improve the perception of your product.
3. Automate The Financial Stuff.
Recurring billing is just one component of holistic subscription management—the financial side—but it’s certainly an important one. After all, keeping your subscription revenue in good shape is the only way to be sure your business will be around to continue selling its subscription services in the future.
Using clunky legacy software or manual-heavy processes isn’t the best way to manage the recurring billing aspect of your business. While it may ultimately get the job done and the invoice to the customer, it’s a time-consuming, error-prone billing method. And, let’s face it—customers probably aren’t thrilled to receive late or error-ridden invoices.
Consider finding a billing solution that automates:
- subscription billing and recurring payment processing,
- dunning communications,
- failed transaction retries, and
- pricing uplifts.
With the financial element of subscription management chugging dependably away in the background, you can focus your resources on other projects to enhance CX and help grow that recurring revenue.
4. Make Cancelation Easy.
Of course, you want to improve your subscription management efforts so your subscription-based customers don’t cancel. But it’s inevitable that some will churn regardless, so you’ll want the cancelation process to be simple.
It’s tempting to make it difficult for customers to leave your business. Hiding the cancelation button, making them jump through hoops, or requiring three months’ advance notice are common but unsavory practices.
Robbie Kellman Baxter, author of The Membership Economy, admits the benefits of these approaches are obvious:
“If you try to [unsubscribe] and are prevented from canceling in that minute of action, you might put canceling on the back burner and let a few more months pass. In many cases, those extra months of revenue are close to pure profit, especially in digital companies, where variable costs approach zero.”
While the FTC is cracking down on businesses that make it difficult for subscribers to cancel, it’s not illegal to do so. In fact, it’s quite a common practice. That said, it’s also damaging to the customer relationship you spent so much time trying to build.
Kellman Baxter continues: “Long-term relationships with customers are based on trust, especially with subscription models. If you make it easy for customers to cancel when they want to, they’ll feel better about the brand and not badmouth it, which is ultimately good for business.”
Not only will it spare you bad publicity, but it may also earn your business a second chance. Remember, a subscription service cancelation isn’t necessarily a “goodbye forever”. In many cases, your customer’s needs may change over time, and if you parted on good terms, they may eventually reactivate their account.
5. Implement The Learnings from Your Data.
Regular reporting has so many benefits for a subscription business. Recording metrics like new, expansion, and contraction monthly recurring revenue (MRR), as well as churn, helps uncover clues as to how your subscription management process is performing over time.
- Cross-examine your expansion, contraction, and churn data with your product release notes. Do you see a spike in upward or downward movement that correlated with an update or new feature release?
- Dig into the firmographics of your best-performing customers. What might these businesses need that you aren’t currently providing?
- Create customer cohorts and group customers that look the same—whether that’s similar firmographics, the fact they signed up in the same month, or something else. What conclusions about their experiences can you draw by seeing the similarities and differences in their life cycles?
Depending on the reports available in your subscription management software, you may have dozens of different data sets available to analyze. The most important thing is keeping an eye on it and applying any learnings to continually improve your CX.
Drive Growth with The Right SaaS Subscription Management Software.
While your customers likely aren’t paying close attention to the way your subscription business manages the customer lifecycle, the way it affects them reflects directly on the overall CX. If it reflects positively, your recurring revenue numbers are likely to increase accordingly.
A modern recurring billing platform like Stax Bill doubles as an all-in-one subscription management solution, enabling you to exercise best practices in subscription management. Not only does it handle automated invoicing and payment acceptance, but it also offers hosted self-service and registration pages and provides a wealth of reports and insights that can help improve the way you deliver the customer experience and grow your bottom line.
FAQs about Subscription Management
Q: What is Subscription Management?
Subscription management refers to how subscription software companies handle the entire client life cycle, from start to end. It plays an integral role in customer experience (CX) and can significantly contribute to business growth if well-managed.
Q: What is an effective Subscription Management process?
An effective Subscription Management process facilitates autonomy, provides assistance in product use, and ensures accurate and timely billing.
Q: How does Subscription Management contribute to business growth?
Efficient Subscription Management contributes to business growth by enhancing the customer experience. Customers who have positive experiences are more willing to spend more on future transactions, thereby helping to maximize customer lifetime value.
Q: How does self-service contribute to effective Subscription Management?
Self-service allows customers to manage their subscriptions, giving them control over their plans, billing details, and account statuses. This sense of control enhances the customer experience and augments product adoption.
Q: Why is customer education important in Subscription Management?
Customer education is crucial as the sooner a customer understands and sees value in your product, the more likely they are to continue their subscription. This education can be offered through self-help resources or guided training.
Q: How does efficient billing contribute to Subscription Management?
Efficient and accurate billing is an important component of Subscription Management. Employing a billing solution that streamlines recurring payments, pricing changes, failed transaction retries, and dunning communications, can improve customer satisfaction and free up resources to focus on improving the customer experience.
Q: How should businesses approach Subscription Cancellations?
Businesses should make the cancellation process simple. By making the cancellation process easy, businesses can maintain positive relationships with customers and potentially earn a second chance if the customer’s needs change.
Q: What are the benefits of reporting in Subscription Management?
Regular reporting allows a business to track metrics such as new, expansion, and contraction monthly recurring revenue (MRR) as well as churn. This information helps to evaluate the performance of the subscription management process over time, and provides insights for making improvements.
Q: What role does a recurring billing platform play in Subscription Management?
A recurring billing platform doubles as a subscription management solution. It handles automated invoicing and payment acceptance, provides self-service and registration pages, and generates reports and insights that can help improve the customer experience and business growth.
