The global subscription business landscape is undergoing significant transformations as companies strive to expand internationally and adapt to evolving customer demands. However, these ambitions are increasingly being met with challenges, particularly concerning billing systems.
According to a recent report, the subscription economy is experiencing robust growth. In Australia, nearly half (46%) of businesses are planning to invest in global expansion over the next year to tap into new markets. Despite this optimistic outlook, a staggering 73% of business leaders express doubts about whether their current billing systems can effectively support their international expansion strategies. This has prompted many businesses to consider reevaluating and upgrading their billing software to ensure it can handle global scalability.
Beyond international growth, many subscription businesses are also looking to innovate their pricing models. A significant majority (78%) of local companies plan to experiment with more flexible subscription plans, such as usage-based billing. However, the rigidity of existing billing systems often poses a barrier to implementing these creative pricing strategies, limiting the ability of businesses to offer the flexibility that modern consumers expect.
The report also highlights a persistent challenge in the subscription industry: involuntary churn. Involuntary churn occurs when customers’ subscriptions are terminated due to issues such as failed payments, often because of expired credit cards. Alarmingly, 47% of Australian businesses have seen an increase in involuntary churn over the past year. Despite this, many companies lack the necessary data to quantify the financial impact, with 42% unable to measure the revenue loss resulting from churn or payment failures.
“Reducing customer churn should be on every business leader’s agenda: it’s cheaper than acquiring new customers and an effective way to maximise revenue and increase customer lifetime value. We hope businesses find this report and Stripe’s revenue recovery features a useful foundation,” said Karl Durrance, managing director ANZ at Stripe.
To address these challenges and support businesses in their growth endeavors, Stripe introduced Stripe Billing in 2018. This software product is designed to help companies manage complex billing relationships with their customers. Stripe Billing enables businesses to easily set up various billing plans, customize pricing logic, calculate amounts owed, preview upcoming invoices, apply discounts, send payment reminders, and track payments. It supports a wide range of pricing models, including one-off transactions, sales-based contracts, tiered pricing, and usage-based pricing, making it a versatile tool for companies of all sizes.
Notable companies like Atlassian and OpenAI are among the over 300,000 businesses that use Stripe Billing to manage their billing operations. Stripe’s leadership in the recurring billing space was recently recognized in Gartner’s Magic Quadrant for Recurring Billing Applications, underscoring its effectiveness in helping businesses navigate the complexities of the subscription economy.
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