From software companies to fitness and even food delivery businesses, the subscription-based business model has seen significant growth over the past decade.
But running a subscription-based business is a lot of work.
While recurring revenue is great, it also calls for continual recurring invoicing. If you’re still using manual processes to create, review, and post invoices, it can demand hours from your team every month.
That is where subscriber management software comes in.
Now, not every subscriber manager software in the market will be the best fit for your business. We’ve compiled this comprehensive guide to help you understand subscriber management software and how to find the right one for your business.
TL;DR
- Look for automated billing, dunning management, multi-currency support, tax compliance, and flexible subscription lifecycle management to streamline operations.
- Set your sights on solutions with real-time reporting, churn analysis, and predictive analytics to optimize revenue and customer retention strategies.
- Scalability is key, so make sure the software supports future growth, accommodates new pricing models, and adapts to changing business needs without limiting functionality.
Understanding Subscriber Management Software
Subscriber management software is a solution designed to help businesses optimize and automate the entire customer subscription lifecycle. Consider it the core for everything related to subscription management, from onboarding new subscription customers to managing renewals and everything in between.
There are features for creating and sending invoices, collecting payments, revenue recognition, reporting, and many others.
Subscriber management software (sometimes referred to subscription management software) aims to improve accuracy, reduce staff administrative burden, and enhance customer experience through efficient, automated processes.
Subscriber management software solutions are adopted across businesses in various industries such as Saas, media, eCommerce, and membership-based businesses.
Key Features to Look for in Subscriber Management Software
When looking for subscriber management software, it’s important to understand the key features that optimize your processes and bolster business growth.
Here are essential features to look for:
Automated billing and invoicing
This feature allows businesses to streamline recurring billing cycles, generate invoices, and process payments based on subscription plans and billing periods.
While most subscriber management software solutions in the market have billing and invoicing features, you need to thoroughly evaluate how basic or advanced their functionalities are.
Assess the following features:
- Automation – The software should fully automate invoice generation by gathering data from your accounting software. Handling recurring payments seamlessly enhances operational efficiency and cash flow.
- Customization – Check whether you get access to customizable invoice templates, allowing you to tailor customer invoices based on your branding, terms and conditions, and any other requirements.
- Consolidation – If you offer different subscription plans, your software should consolidate all information on each invoice. For example, if a customer already subscribed to a specific plan makes a one-off purchase, you should provide a consolidated invoice showing both the monthly subscription fee and the one-off charge.
- Dunning Management – The software should automatically retry failed payments and send reminders for pending and late payments. This helps your business reduce involuntary churn.
- Multi-Currency Support – If you have a presence in other countries, your software will likely need to support multiple currencies. It should also manage invoicing in multiple currencies to accommodate your global customers.
- Tax Compliance – The software should manage tax calculations based on different regions and tax laws, ensuring compliance. Automated tax calculations and compliance can reduce the risk of human errors and streamline financial reporting.
Subscription lifecycle management
Subscription lifecycle management adopts and modifies subscription plans through the customer lifecycle. Ensuring your subscriber management software supports flexible subscription plans and pricing structure changes can significantly boost customer satisfaction, optimize revenue streams, and streamline operations.
In addition, a platform with subscription lifecycle management capabilities can help you meet diverse customer needs and maintain business agility.
Here’s a breakdown of features to look for when it comes to subscription lifecycle management:
- Upgrade and Downgrade Flexibility – This allowsEnsure customers to easily upgrade to higher pricing tiers, downgrade to lower plans, or switch plans seamlessly if their needs change. This flexibility can boost customer satisfaction and reduce churn rates.
- Cancellations and Renewals – The software should simplify the subscription cancellation and renewal process, helping customers make these decisions with minimal friction. It should also send automated reminders and notifications to customers about upcoming subscription renewals.
- Discounts, Coupons, and Promotions – Choose software that streamlines the management of discounts, coupons, and promotions. It should incorporate these features into your sales funnels without charging you an extra fee to unlock them.
- Free Trial Periods – The software should also allow you to offer new subscribers free trials or discounted introductory periods. This allows potential customers to experience your products or services without prior commitment, boosting conversions.
- Prorated Billing – Look for subscriber management software that bills and invoices customers proportionally to the number of days they used the product or service. This promotes fair and accurate billing when customers upgrade, downgrade, or make any mid-cycle changes.
Reporting and analytics tools
Your subscriber management software should have reporting and analytics tools to help you make data-based business decisions. The reporting capabilities should be real-time, allowing you to monitor key metrics as they happen, make timely decisions, and respond quickly to emerging issues.
These features should give you access to important revenue and growth metrics like customer lifetime value (CLV), monthly recurring revenue (MRR), and annual recurring revenue (ARR). You should also be able to conduct a churn analysis to identify patterns and causes of customer attrition.
Check whether you can also track operational metrics like billing efficiency, service uptime, and support response times. These metrics can help you keep your operational performance optimized.
Look for software with predictive analytics to help you forecast future trends based on historical data. Predictive analytics help you anticipate customer needs, plan marketing campaigns, and optimize resource allocation.
When comparing subscription management software based on reporting and analytics tools, assess the level of customization and the depth of insights they provide.
Customizable dashboards allow you to choose the most relevant business metrics to include in your reports. You can also choose how frequently you want to receive automated reports. These features help your team members focus on metrics that matter most based on their rules and schedule reporting to keep stakeholders informed without manual data extraction.
Integration with CRM and payment gateways
According to the U.S. Chamber of Commerce, 95% of small businesses use at least one technology platform, with high-tech usage correlating with growth in sales, employment, and profits.
If you’re like most business owners, you already have a tech stack in use and you don’t want to switch from one software to another to access data. This is why you need to consider integration with other business tools.
Here are some critical integrations to evaluate:
- Customer Relationship Management (CRM) – Your subscriber management software should integrate with CRM systems such as HubSpot, Salesforce, and Zoho. This gives you a unified view of all customer interactions.
- Payment Gateways – Check whether the software integrates with popular payment gateways. This gives your customers flexibility when it comes to payment methods.
- Accounting and Financial Systems – Integration with accounting and financial systems such as QuickBooks, NetSuite, and Xero helps you streamline your financial management. It also automated the synchronization of invoicing, billing, and payment data, eliminating manual data entry.
- Enterprise Resource Planning (ERP) – For larger businesses, check for integration with ERP systems such as Oracle and Microsoft Dynamics for a seamless flow of data across the entire business ecosystem.
- Marketing Automation Tools – Integration with marketing automation tools such as Marketo and MailChimp helps you streamline your marketing strategies and improve personalized marketing and personalized assistance.
The subscriber management software should also have API (Application Programming Interface) availability for custom integrations. This is an important feature that allows businesses to connect with niche tools and in-house systems, ensuring seamless integration with unique workflows.
User-friendly interface and customization options
A good subscriber management software should offer an intuitive, easy-to-use user interface. Remember, different stakeholders from different departments plus your customers will interact with the software.
With a user-friendly subscription management platform, you reduce the learning curve and ensure efficient operations with minimal disruptions.
Intuitive software can minimize training hours and potential errors. Take the time to asses areas such as the clarity of the dashboard and the simplicity of tasks like generating reports and updating customer data. Check how easy it is to navigate from one page or feature to another, and back.
Mobile accessibility, whether through a dedicated app or browser, is a convenient feature especially if you travel a lot or have a remote team. This enables you to access your reports and important management functionalities on the go.
The right software also helps you customize your subscription plans, branding, and workflows to match your business needs.
How to Assess Your Business Needs
While often overlooked, assessing and understanding your business needs helps you choose the right subscriber management software for your business.
Start by understanding your current subscriber base. This helps you determine the functionality and capacity required from the software. Consider the following aspects:
- Subscriber Demographics – Understand the demographics of your subscribers, including their geographic locations, roles, occupations, and industries.
- Subscriptions Plans and Pricing – Evaluate the variety of subscription plans you offer and their pricing plans. What’s your billing frequency (monthly, quarterly, annually)? Which subscription plans do you offer (fixed, tired, usage-based)?
- Customer Engagement – How engaged are your customers with your services? High engagement requires more advanced reporting and analytics tools to understand customer behavior.
After analyzing your subscriber base, estimate your growth and scalability needs. As your business grows, your software must scale based on your needs. What is your projected subscription growth rate? Do you plan to expand to new markets or add new features?
Look for software with scalable solutions, such as flexible subscription pricing models, multi-currency support, automated workflows, and robust integrations with other business tools.
It can be helpful to identify the pain points in your current processes to determine the features that will have the most impact on your business.
For example, if manual billing is error-prone and time-consuming, you likely need software with automated billing capabilities. If customer churn is an issue, look for software with advanced analytics and customer segmentation tools to identify retention challenges.
Finally, since different industries have different subscription management needs, you need to prioritize software features based on industry requirements.
For instance, SaaS businesses prioritize features like flexible billing models, usage-based pricing, and detailed analytics. On the other hand, eCommerce businesses focus on integration with inventory management systems, membership management, and personalized customer interactions.
Comprehensively evaluating these factors ensures you choose a subscriber management platform that aligns with your current business operations and future growth.
Evaluating Different Software Options
Now it’s time to evaluate different subscription management solutions. This step involves a thorough evaluation of different factors.
Research market leaders and emerging subscription management tools. This is beneficial for understanding the range of innovations and features available in the market. An established software provider such as Stax Bill offers robust capabilities including automated recurring billing, flexible subscription plans, and integrations with payment gateways.
On the other hand, emerging tools might have innovative features like AI-powered billing or specialized features for niche industries.
Once you have a shortlist of potential solutions, read user reviews and case studies to get insights into how different subscription services perform in real-world scenarios. Look for the tool’s strengths and weaknesses in ease of use, customer support quality, and scalability.
User reviews on platforms like G2, Capterra, and Trustpilot will give you unbiased feedback from existing users. Providers often feature case studies on their websites showcasing how their software helped businesses improve efficiency, reduce churn, or increase revenue.
Request demos and trial periods to experience the software firsthand. This helps you evaluate the software’s user interface, ease of setup, and overall usability. Prioritize testing features critical to your business, such as billing automation, reporting and analytics, or subscriber management.
In addition, understand the software provider’s pricing model. Most providers adopt the following models:
- Flat-Rate Pricing – This model charges a fixed monthly or annual fee regardless of usage. It may be predictable but not cost-effective for businesses with a fluctuating number of subscribers.
- Usage-based Pricing – You pay based on usage, volume of transactions, or number of subscribers. It’s a scalable pricing model but unpredictable if subscriber numbers surge.
- Hybrid Pricing – This model combines flat-rate and usage-based pricing models. It provides predictability and flexibility for growing businesses.
Questions to Ask Potential Vendors
At the surface level, it might look like you’ve found the best software to get into a long-term contract. But it’s vital to ask a series of questions to ensure you’ve found the right software vendor.
Ask these questions to qualify the vendors:
- How often is the software updated? Will the updates cost money?
- What level of customer support do you offer?
- Can my customers manage subscription cancelations, pauses, and refunds themselves?
- Can the software manage multiple subscriptions with different billing frequencies? How does the software manage proration?
- Can I test different subscription plans against each other?
- How can I manage coupons, promotions, discounts, demo accounts, and trial periods?
- How do data migration and onboarding work? Do you provide customer training?
- Are there any hidden fees or long-term contracts?
- What subscription analytics and metrics can I track, and at what level of detail?
- Which data security measures do you have in place? Is the software compliant with industry standards and regulations?
- What third-party system integrations are available? Does the software require custom integration?
- Does the software have limits on user numbers or transaction volumes?
Implementation and Onboarding Tips
Implementing subscription management systems requires careful planning, execution, and ongoing refinement. Have a clear, detailed implementation timeline to ensure all stakeholders are aligned and the project stays on track.
The implementation timeline should include the project scope and goals, manageable phases, and milestones and deadlines. Allocate resources to each phase accordingly and use project management tools to track the implementation.
Train your staff adequately to ensure proper software utilization. Organize workshops or online sessions for different user roles, such as billing, marketing, sales, and customer support teams. Ensure all teams across all departments understand the software’s purpose and their role in its success.
For example, your accounting team should understand billing workflows while your marketing team should grasp subscriber data analysis.
Ensure the provider offers software documentation, video tutorials, FAQs, and other training materials for ongoing reference.
Test the software and troubleshoot thoroughly before full implementation. You can conduct pilot tests by launching the software with a small group of users or specific departments to spot potential issues.
Test its functionalities by simulating scenarios and use cases, such as billing cycles, plan upgrades, or cancelations. Also, verify the seamless flow of data between the software and your CRM, ERP, accounting system, and other tools in your tech stack.
Once you’ve fully implemented the software, prioritize continuous refining. Collect feedback from your employees and customers to gain insights into areas that need improvement. Use this feedback to refine your workflows, update training materials, and fine-tune software settings.
Measuring Success and Optimizing Usage
It’s important to continuously measure success to see whether the software is meeting your needs and supporting your business goals.
This means tracking important metrics to understand the health and performance of your business. Important metrics to track include:
- Churn Rate – This measures the rate at which your customers cancel their subscriptions. A high churn rate can indicate issues with customer satisfaction, pricing, or service quality. A healthy churn rate is between 5% and 7%.
- Customer Lifetime Value (CLV) – CLV is the total revenue a customer generates for your business. This metric helps you determine how much money to invest in customer acquisition and retention.
- Monthly Recurring Revenue (MRR) – MRR represents the predictable income your subscriptions generate each month. It gives you a picture of your business’s financial health.
Leverage analytics like customer segmentation, usage patterns, revenue drivers, and churn analysis to identify trends, patterns, opportunities, and challenges. These analytics help you fine-tune your offerings and stay ahead of your competition.
As your business evolves, your software will need to adapt to new requirements and challenges. Regularly update your subscription management software to ensure it remains aligned with your business goals.
Common Mistakes to Avoid
Business owners make some common mistakes when implementing subscriber management systems. It’s important to avoid these common pitfalls to ensure a successful and sustainable transition.
Let’s take a look at some of these mistakes to avoid:
Overlooking scalability for future growth
One of the most significant mistakes business owners make is overlooking scalability for future growth. Selecting software with limited subscriber capacity may lead to performance issues as your subscriber base expands. Also, choosing a basic solution may limit your ability to adapt to future needs like global payments and multi-tier subscriptions.
To avoid this pitfall, choose a scalable solution that accommodates feature and subscriber growth.
Choosing price over functionality
Sticking to your budget is important. But prioritizing cost over functionality can be expensive in the long term. Less expensive software solutions often lack critical features like robust reporting, automated billing, and integration capabilities. They also have hidden costs and additional charges for updates, support, or exceeding usage limits.
To avoid this mistake, assess the total cost of ownership (TCO), including setup fees, training, and long-term operational expenses. Opt for software that provides the features and capabilities your business needs.
Failing to integrate with existing systems
Subscriber management software that doesn’t integrate seamlessly with your existing business tools creates data silos and inefficiencies. Inconsistent flow of data between systems can also hinder accurate reporting and decision-making.
Ensure the software integrates with your CRM, ERP, accounting system, and analytics tools. Also, check for APIs and pre-built integrations offered by the software provider.
Conclusion
Subscription management software is crucial if you run a subscriber-based business. It’s the difference between administrative nightmares and streamlined operations. But it’s only effective if you choose one with the right features for your business.
By keeping in mind the above tips, you can find a solution that will help you enhance your customers’ experience, drive business growth, and improve your business’s bottom line. Don’t forget to consider your long-term business needs.
Investing in the right subscriber management software is an investment in your business’s future.
