Managing subscriptions is without a doubt one of the top priorities of a subscription business. However, subscription management is a multi-faceted process—it encompasses obtaining and retaining your customer subscriptions, recurring billing, payment processing, dunning management, and the list goes on.
The broad scope of managing subscriptions means it’s imperative to optimize your system for maximum efficiency. The simplest and most effective way to do so is to adopt an agile, customizable subscription management software that automates the whole process, integrates seamlessly with your existing tech stack, and provides a cornucopia of real-time data and reports.
Replacing your subscription business’ manual or outdated recurring billing software with a modern, automated system can allow you to reduce time spent on subscription billing and virtually eliminate manual errors (and therefore minimize revenue leakage).
In turn, this efficiency can provide the opportunity to scale your business—potentially by as much as 3X, without having to scale up your staff.
Sounds like a dream come true, right?
In case you’re still not sold, allow me to share five specific ways real-time analytics can help you run your subscription business more effectively and efficiently. And by the way, this actionable data is just one of many side perks associated with automated subscription management software.
1. Subscription management software analytics enables smart, data-driven business decisions.
Data-driven decision-making (DDDM) has become a buzzword in the business world in the last decade or so, and for good reason—a 2014 study by PwC shows executives who are highly data-driven were three times more likely to report significant improvements in their decision-making abilities when compared to those who didn’t take a data-driven approach.
In the highly competitive B2B SaaS world, it’s imperative to use DDDM—you can absolutely bet the farm on the fact your competitors are using data to make their decisions.
DDDM can help you make realistic, informed resource management choices, accurately calculate your cash runway, forecast future sales and revenue, and scale your business strategically.
To effectively use DDDM, you need easy and secure access to reliable, accurate, comprehensive data that’s updated in real-time.
Not only that, but you need to be able to interpret the data and understand it so you can gain meaningful insights into the performance of your subscription-based business.
A comprehensive subscription management software provides accurate, up-to-the-minute data as well as powerful tools that turn the data points into contextualized, easily understandable reports. These immediate insights into key metrics allow you to make confident, data-driven decisions that are truly in the best interest of your business.
2. In-depth MRR reporting helps you make proactive adjustments.
Monthly recurring revenue (MRR) is an essential insight for a subscription business, where long-term customer relationships are crucial for success. By looking at this month’s MRR, you can predict generally how much recurring revenue you’ll make next month.
And, by monitoring MRR data, you can keep your finger on the pulse of emerging trends in customer behavior. In turn, this can help your team develop solid customer retention plans and ultimately extend customer lifetimes.
An automated subscription management system provides reports on four different types of MRR:
- New business MRR – This measure of added revenue from new customers quantifies the efficacy of your marketing campaigns and sales teams. It shows that your teams are obtaining qualified leads and converting them to customers, and provides helpful data surrounding the growth rate of your business.
- Expansion MRR – Expansion MRR shows when your existing customers take actions like upgrading their subscriptions, adding new features, or adding more subscribers to their accounts. This indicates customer satisfaction and shows when upselling campaigns have been successful.
- Contraction MRR – The opposite of expansion MRR, contraction MRR shows when your existing customers have downgraded their subscription in some way. A high contraction MRR could indicate that customers feel your price is too high or they aren’t receiving enough value. This metric can help you assess your product pricing and ensure that you aren’t losing customers to a lower-priced competitor.
- Churned MRR – Churn MRR helps you accurately forecast your cash runway by indicating how much recurring revenue you’ll lose to churn over time. It can also provide insights into which specific customer groups are churning the most so you can make targeted changes and improvements.
Automatically generated MRR reports are available immediately and they are highly accurate, which means you don’t have to wait around for your finance team to produce the reports each month or risk manual errors.
This instant, reliable data allows you to see patterns as soon as they emerge and get to work identifying the cause.
Then, you can pivot your business strategy right away to either correct course (if you notice downward movement) or support a period of fast growth (if you see rapid upward movement).
3. Real-time data acts as an SSOT for all business departments.
If you’re using multiple different tools to gather and compile data about your business, you likely know the struggle of maintaining up-to-date, accessible, and digestible reports that can be used by all of your team members.
One simple transcription mistake can corrupt an entire report and impact your business negatively at every level.
With an automated subscription management platform that has real-time analytics,
- all of your data is in one place,
- the risk of manual errors is virtually eliminated, and
- all of your teams can access the information easily and securely.
It’s the single source of truth (SSOT).
Gone are the frustrating days of unreliable, outdated data and having to consult three different programs in order to get an idea of what’s going on in your subscription business.
A subscription management system functions as a data bridge between other components in your tech stack, including your CRM, ERP, payment gateways, and, in many cases, your business’s own product. Because it interacts with all these other pieces of software, your subscription management platform can pull data from the other systems to build reports that show the whole picture in real-time.
The SSOT provided by subscription management software benefits every team within a business, including sales, accounting, customer support and success, marketing, and even the executives.
Everyone is on the same page, referring to the same data, and confident that the information they are referencing is correct.
4. Accurate, accessible data allows you to improve the customer experience.
Given that your entire business can benefit from real-time analytics, the data can help customer-facing teams create a better customer experience (CX) as well.
3 examples of customer experience improvement as a result of a subscription management system:
- When a potential customer calls looking for a price quote on your subscription product, your sales team will have up-to-the-minute data on current pricing, availability, and so forth. This helps eliminate incorrect quotes, which can create mistrust and lead to lost sales.
- When a current customer calls for support, the customer support team can easily pull up their contact information, subscription history, account details, recurring billing information, past and future invoices, and other useful customer data. This prevents customers from having to answer a multitude of questions before the support agent can even address their main concern, and it shows the customer they are valued.
- An automated recurring billing system also ensures consistent invoicing for customers. This automation dramatically reduces billing inaccuracies that can result from manual errors, which means you have fewer frustrated customers, a lower churn rate, and a greater customer lifetime value.
5. Up-to-date reporting helps you scale more effectively.
Scaling your subscription business requires a careful analysis of how your business is currently performing, understanding how it’s performing in comparison to previous months, and accurately forecasting how it will likely perform in the future.
This information allows you to make those strategic, data-driven decisions we talked about, and manage risk as you grow your business.
Automated subscription management software provides a wealth of information to help you scale, including:
- Calendar reports to help with sales forecasting
- Sales reports to inform product development and pricing strategies
- Customer reports to develop and refine your marketing campaigns
- MRR reports for creating customer retention plans
- AR aging reports to track down and manage unpaid invoices
- Revenue reports to help you stay in compliance with revenue recognition rules
With all these real-time reports at your fingertips, you can easily get an accurate idea of your business’ performance. And, with all the time you saved by not having to generate manual reports, you can focus on developing and implementing strategies to scale your business.
A subscription management solution with real-time analytics is essential for a maximally efficient tech stack and a scalable business.
As CMO Patrick Edmonds says, “Technology like AI has been around for a long time, but not in a usable way for companies. Data wasn’t being tracked properly, it wasn’t clean enough, it wasn’t being aggregated into a data warehouse where it could be manipulated and passed back into other systems to be useful. That’s changed. Strong data and analytics practices are becoming table stakes, especially in the B2B world.”
For subscription businesses, standalone recurring billing automation is just one component of your tech stack. If you’re looking to grow your business, you need all the benefits that come with a full-scale, modern subscription management solution that provides real-time analytics and a wealth of data.
It can help you make better business decisions, reduce friction for your teams and customers, outperform your competitors, and scale your business strategically.