Already sold on the benefits of switching from fixed to subscription-based pricing? You and scores of other business leaders around the country and further afield. As Australians become increasingly comfortable with the idea of using products and services rather than owning them outright, it makes sense for your organisation to at least give them the option to do so.
Selling on subscription can be a major change for traditional businesses and a very savvy one too. Benefits include greater customer lifetime value, improved cash flow predictability and the opportunity to remain in ongoing contact with customers.
Making the switch successfully
It can, however, be a challenging pivot to pull off, in the absence of the right tools – namely, a subscription management platform that allows you to engage with customers efficiently at every stage of the purchasing and payment journey.
Why is this so important? In short, because when you’re in the subscription sales game, profitability depends on the longevity of customer relationships. Successful businesses are those whose buyers keep coming back for more, month after month and year after year.
They’re far more likely to do so when each and every one of their interactions with a supplier, both personal and digital, are orchestrated efficiently and professionally.
Conversely, if glitches occur at any stage, buyers tend to lose trust and that makes customer churn much more likely.
This is especially the case where billing is concerned. Being charged incorrectly for products or services consumed is a serious negative as far as customers are concerned.
Inhouse or in the cloud?
Getting it right is, therefore, imperative and businesses have two choices. They can establish and operate their own subscription management platform and processes inhouse. Or they can adopt a cloud-based subscription management software platform that’s been designed for the purpose.
Doing the former calls for a significant investment in ICT infrastructure and the acquisition of a team of skilled ICT professionals to run it.
Over time, there’ll be a range of planned and unplanned expenses associated with keeping the solution up and running – think maintenance, upgrades and staff training.
All up, it can be a capital-intensive exercise and one that introduces additional complexity and ongoing overheads. And it typically comes at a time when those costs are least able to be absorbed by the organisation in question, given the initial drop in revenue that typically accompanies a switch to subscription billing.
Exploring the alternative
Opt for a cloud-based subscription management platform and it’s a very different story. No ICT infrastructure upgrades, no upfront licensing fees and no difficult-to-recruit-and-retain ICT team.
Instead of that heavy upfront investment, you’re able to pay a modest usage based monthly fee to achieve the same ends.
Should you select a best of breed solution from a vendor that’s committed to continuous improvement, its quoting, subscription, renewal, recurring billing, collections and revenue recognition processes are likely to be automated; saving your team time and trouble.
New services and packages should be able to be launched quickly and easily, and upselling and cross selling campaigns introduced at speed; thereby enabling you to maximise your revenue opportunities.
And the very real challenge of safeguarding customer data – a weighty responsibility in today’s times – will be taken care of by your solution provider. That’s of course providing you choose to work with a market leader that has its own highly skilled cyber-security team working round the clock to protect its platform and customer base.
Understanding the benefits
In fact, smartly implemented, cloud-based subscription management software is critical digital infrastructure – enabling technology that provides comprehensive quote-to-cash support for whatever subscription-based pricing model you decide to introduce.
Invest in a platform that connects seamlessly with your CRM software and you’ll be able to monitor the popularity of your new pricing model and manage your customer base at a granular level.
And, if your chosen platform incorporates a sophisticated data analytics function, it will also be possible to generate actionable insights that can be used to modify your offering for maximum customer appeal.
Starting your subscription journey strong
Cloud based subscription management software is a cost-effective option that delivers the flexibility and functionality fledgling subscription businesses need to get up and running. If making a success of this new sales model matters to your organisation, it’s foundation technology that should sit at the core of your ICT stack.
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