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What is Subscription Management?
Learn about subscription management and how businesses and consumers can benefit from this.
Due to this impending growth, companies are exploring subscription management systems such as those recurring billing models that work to maintain their customer base and manage their spending on apps, goods, and services they subscribe to.
Subscription management is the overall process of managing the complete customer’s journey from price setup, sign up for a product or paid service, until the business issues an invoice, receives the payment, handles and responds to feedback (queries and complaints), process downgrades and upgrades, to cancellations or renewal.
A subscription business model usually generates revenue growth from billing consumers at predictable intervals. Businesses offering goods and services regularly build recurring customer relationships. Consumers can sign up for subscriptions to access products, experiences, and services within a specified period.
Therefore, subscription management is essential to guarantee customer satisfaction from onboarding until the end of a subscription. Automation can be integrated into this process to streamline complexities, provide accurate pricing, trim down costs and establish seamlessly working operations.
Subscription Management vs Recurring Billing
At a glance, subscription management and recurring billing sound similar because both concepts bring periodical access and payment to goods and services. However, these are two different things.
Recurring billing refers to the process of asking customers to pay for products and services availed at regular intervals using pricing models. Meanwhile, subscription management is the process of handling every step involved throughout a consumer’s subscription journey to ensure retention. Both are important in subscription-based businesses to retain customers through automated management and billing solutions.
A recurring billing automation system allows businesses to technologize billing, eliminate errors, handle upgrades and downgrades, and control billing and invoicing.
Subscription management solutions and recurring billing always work together. Recurring billing provides innovative solutions through automation and technology, while subscription management solution offers control and flexibility.
Importance of Subscription Management
Subscription management lets you retain your customers and renew for another period to enjoy your products and services set at different billing models.
You can retain customers through a subscription management solution. You offer a renewal for paid-for products and services set at a time and use different billing models.
Before Sign Up
The goal for every subscription is to encourage potential buyers to sign up. At this stage, you offer promos, discounts, and free trial periods to help them make their decision.
Businesses using this model should set the correct trial duration and use this as an opportunity to collect customer information. The goal is to turn the trial period into a regular subscription and smoothly process the payments. This stage prompts the customer lifecycle and ensures they are onboarded in a recurring billing platform.
During the Subscription
While the customer is enrolled on a product or service, subscription-based businesses should make sure workflows run smoothly by managing the following:
- Payment failures – Subscription management involves resolving payment issues due to outdated customer information, expired credit cards, system glitches, and other factors. Payment failures may hurt your revenue.
Subscription management may automate consumer reminders of their payment obligations. Moreover, it has a dunning management feature that helps automate payment recovery. This feature immediately notifies a customer of the payment failure and initiates the payment recovery process.
- Payment security – Customer shares card details and other personal information during sign-up. In a subscription-based model, you must ensure that these data are kept private and confidential.
- Subscription pricing plan changes – You should efficiently manage upgrades, downgrades, and all add-ons.
Some current plan features may not be working for the customer when they downgrade from their existing subscription. In this case, you should review the plan inclusions and revise them accordingly.
Moreover, it would be best to clarify conditions for upgrades and downgrades before the sign-up process.
- Communication – Although the subscription model is generally a self-service system, establishing communication through reminders, emails, and other forms of informative coordination will improve user experience and give customers value for their money. Communication facilitates the renewal of subscriptions and consumer satisfaction and retention.
When the Subscription Ends
Whether you like it or not, the subscription services end periodically, too. During this time, you should know the reason for cancellation or non-renewal. Non-renewal of subscriptions can impact the revenue growth of the company. The subscription management system, at this point, will let you know the reasons for non-renewal or cancellation, handle refunds, and get customer feedback.
Subscription Management for Customers
Consumers do not just sign up for services but also manage them. Due to the increasing number of industries adopting the subscription business model, customers receive numerous billing statements each month once they subscribe to them. Recurring billing reminders can come at regular intervals and be missed if manually paid.
Customers, especially those businesses subscribing to services and apps for their operations, can optimize automated bill payment systems. Spenmo’s virtual cards can help business owners track, monitor, and categorize SaaS subscription spending.
If not adequately managed, consumers are charged late payment fees and may not access the application or service they are subscribed to. At some point, they may need to review some of their subscriptions that are no longer useful but continuously still pay for. Therefore, subscription tracking functionality is essential to oversee what customers pay for and use regularly.
Tracking and Saving More Money
You may find that keeping track of your subscriptions can be difficult, primarily if you use several accounts to pay them off. Here are three ways how you manage your subscriptions:
- Set your calendar alerts – Always set a reminder, whether it’s for a free trial or a regular subscription service you signed up for. Put at least two to three days of notice beforehand on your calendar to make you remember the upcoming end of the subscription.
- Take note of your payment details – List down important information such as card used for payment, card expiration date, duration of your subscription services, and payment due dates.
- Use a payment billing software – SaaS companies offer payment solutions for recurring billing to help you settle your bills in real-time. Payment processing for all subscriptions is made easy and convenient regardless of the currencies used.
Checkout and use Spenmo to automate your subscription payments and enjoy 2% cashback on all cards spend, maximum of SG$2000.
SaaS Subscription Management Software
Companies have designed SaaS subscription management software to manage recurring bills and streamline the steps of subscription services. These gather relevant customer data and break them down into several categories like one-off payments, bills, and subscription services.
SaaS subscription management software allows you to cancel subscriptions, analyze pricing plans and renegotiate deals. More advanced services may help you forecast proration, automate debt payments and do more than subscribe and unsubscribe to services and goods.
Moreover, subscription management platforms for SaaS businesses can be integrated with any accounting software and automated to facilitate recurring billing services. These applications can save customer data and handle most subscription tasks automatically.
Catalogue management software, e-commerce sites, payment gateways, and other SaaS applications can all be combined with subscription management software to:
- Record consumer information
- Keep records of payment and payment details for subscription billing
- Automate billings and payments
Subscription Management FAQS
What is bundled pricing?
What is a tiered pricing model?
What are the different billing cycles for subscriptions?
What is customer churn and why is it important?
So, if you have 1000 subscriptions at the beginning of the period and you lost 100 at the end or before the end of the period, you have 900 customers left. The customer churn rate is 10%.