According to a MarketsandMarkets study, the global subscription and billing management market is growing fast! The study shows that the market will be valued at $7.8 billion by 2025. The key drivers are the rise in subscription model businesses and growing demand for reducing customer churn.
But, with so many subscriptions management software out there, choosing the best one for you can be daunting. Your primary considerations should be access to accurate data for analyzing customer lifecycle behavior, reducing customer churn rate, and revenue recognition and management.
Going with the wrong choice of subscription management platform can be costly in the short and long term. We’ve put together this guide to point you in the right direction when choosing the best SaaS business software.
So, let’s get to it!
What is subscription management?
First things first! What is subscription management? Simply put, subscription management manages your SaaS customer lifecycle subscriptions and gives them a satisfactory experience with your software subscription services.
Subscription management starts immediately when a customer signs up for your software services and stops when they unsubscribe. Thanks to the subscription management solution, your customers enjoy flexible pricing, matching current market trends.
What is subscription management software?
A subscription management software is a software solution for managing customers’ subscriptions and increasing customer lifetime value. Subscription service businesses rely on subscription management software to automate service delivery.
What subscription management software can do for your SaaS or subscription business
The core function of subscription management systems is to schedule and accept recurring monthly payments. These tools offer additional payment methods that can help subscription companies reach global customers, monitor their business performance, and more. Here are a few key ways these systems benefit subscription companies.
Subscription management services bring together several payment and billing functions.
Without a systematic approach to subscription management, it’s very easy for things to fall through the cracks. And every time that happens, you’re losing out on potential revenue.
Subscription management services automate your recurring payments and generate invoices for each transaction. This functionality saves time that would otherwise be spent manually generating each invoice, inputting data into a payment processor, and scheduling a payment. Every transaction is automatically tracked and stored for future reference, making analyzing trends and reporting on them much simpler.
Collect foreign currency
Many subscription services work with different payment gateways. Working with several gateways ensures that regardless of the geographic location of your customers, you’ll always be able to take payment. Using multiple payment gateways also makes it easier to provide a seamless customer experience for any customer. Focusing on only one payment gateway would cause unnecessary and troublesome bottlenecks in your process.
Offers insight into subscription metrics
Most subscription management platforms will provide reporting and analytics on your payments as a part of their service. This makes tracking key metrics like LTV, MRR, and churn easier, taking away the potential for human error or bandwidth constraints. Whether you’re an ecommerce subscription box or a B2B software app, understanding these metrics helps you evaluate your pricing models and make better decisions to support the growth of your business.
Sends transactional emails
While not every service will offer this feature, some subscription management tools help you send automated subscription billing emails to customers. Automating these email receipts, dunning emails, and retention campaigns saves you time and ensures the customer is always up-to-date with correct billing cycle information.
Sending these emails through your subscription management platform can potentially cut down on your marketing costs and prevent you from having to purchase an email service provider to handle these processes. It also decreases the potential for integration or data-sharing issues by keeping these emails under one tool.
Reduce customer churn
No doubt, it’s more costly to acquire new customers than to retain existing ones. Whether you like it or not, retaining 100% of your customer base can be daunting. The best you can do is increase your customer retention rate by reducing the churn rate.
According to a Bain and Company study, a 5% increase in customer retention can increase profits by 25%. This is why you want to put your best foot forward to reduce the customer churn rate in your subscription business.
There are many ways to reduce customer churn rates. One way is to show your customers that you care. And there’s no better way to do it than through subscription management software. The best software integrates various features to increase customers’ lifetime value and satisfaction.
Overall, a robust subscription management software removes bottlenecks in subscription upgrades, downgrades, customer support, and secure online payments. The rule of thumb is to make the above hassle-free, and your customers will almost have no reason to leave.
Some subscription management services like FuseBill offer the ability to send coupons and discounts directly to customers. These discounts can help you retain more customers by making them an enticing offer to stay. Depending on the management service, these discounts can also boost the acquisition of leads in your marketing funnel.
Now that you know how a subscription management service can help you streamline your billing processes, it’s time to figure out which one is the best fit for your business.
Manages contract downgrades/upgrades/cross-sells
Increasing customer lifetime value depends on how well you exceed their expectations. Managing contract downgrades, upgrades, and cross-sells manually can be frustrating. You risk leaving so much money on the table if you don’t have enough support staff.
No doubt, it’s a lot easier when you rely on a software service to make work easier for you and your subscription service customers. If you do it right, your customers should downgrade and upgrade subscription plan renewals instantly with the click of a button.
They should also place orders for other subscription business supporting services you offer, like cross-sells. A subscription management software is the sure way to achieve this!
What to look for in the best subscription management software
The right subscription management software will be the one that fits your specific needs. A small startup offering single-tiered monthly subscription renewals won’t need the same kind of functionality as a multi-tiered enterprise solution. Deciding on which management tool to use depends on several factors, such as your pricing strategy, technology stack, and customer base.
And there are a lot of options to choose from.
Payments market map via CBInsights.
With so many services in the market and more popping up every day, choosing a subscription management tool can feel overwhelming. Stay on track and find the best tool for your company by considering the following five factors when reviewing any service.
Easy integration with your tech stack
Drastic changes to your technology stack are never a good idea, so it’s paramount that your subscription management service integrates with the existing technology in your company’s tech stack. It might seem like this is easier for small companies with fewer services in use. However, even small companies must factor in how their technology will grow and what integrations they’ll need as the company scales.
On the other hand, Larger companies will likely encounter issues with technical debt and complex systems that require more specific features from a new tool. That said, they’ll also have the resources to work through more complicated payment processes in house.
Payment gateways for target customers
Know your buyer personas inside and out. Understanding their preferences, interests, and location is important when creating personas. If a segment of your customer base is located in Asia, for example, you’ll need subscription management software able to process payments in that currency. The same can be said if you’re thinking about expanding into new markets. Your tools need to grow with the demands of your company.
When you’re investigating a new service, check out its own integrations page. If you don’t see payment gateways listed that support your customer locations, that’s an immediate red flag.
Accessible and insightful reports
What metrics are the most valuable for your business? Does your subscription management service report on them? The software you choose should be able to deliver insights on your business that help you grow. If you want to track your CAC payback period or how your ARPU is changing, for example, look for a subscription management service that reports on these metrics.
It’s also important to review how these reports appear visually. Gathering information on these metrics is more difficult if the reports are confusing or incomplete.
Easy subscription revenue recognition and management
Your business is subscription-based, and it’s crucial to account for the revenue accrued over time. Subscription revenue recognition and management can be a hassle without a robust system. You may have to do it manually, which is frustrating and time-consuming!
The best subscription management software you opt for should have this feature integrated into it. This way, your accounting books will always be up to date and accurate in real-time. You’ll also understand your business’s financial health and which one of your subscriptions services is more profitable.
Accurate data analytics
Understanding customer behavior is the key to exceeding their expectations and maximizing your profits. You want to know what subscription services your customers love and the type of content you should publish.
But this can be hard to pull off without an accurate inbuilt data analytics feature. Operating without accurate data analytics is like a hiker without a GPS. This is why you should pay attention to this feature when looking for a subscription management system.
Whenever you look for new tools to support your business, it’s important to see what customers of those tools say about them before committing to making a purchase. With that said, read reviews of subscription management services so you can make an informed purchase. Just make sure you’re looking at these reviews in aggregate—5 negative reviews out of 20 is much more telling than 5 out of 500.
Helps you get results
Setting goals for your company’s growth is important. Every piece of software you use should contribute something of value toward achieving these goals. If your subscription management service doesn’t help your company grow, then why have it in the first place? When you integrate a new tool into your tech stack, it needs to add value.
If your reports are inaccurate, or the integration to your tech stack requires a lot of ongoing maintenance, there’s no point in using the service.
Top subscription management platforms compared
With so many subscription management software on the market, choosing the best one for you can be daunting. Luckily for you, we’ve put together a list of some of the best subscription management software to consider. More importantly, they’re reliable and easy to use!
|1. ProfitWell||Detailed subscription reporting and analytics. Granular reporting for upgrades, downgrades, churn. Metrics comparison with similar companies.Data-driven retries. Integrated with other platforms like Chargebee and Stripe.||People looking to reduce subscription churn losses and recovering at-risk customers.|
|2. Chargebee||Automated addons for easy upsells. Dunning management.Abandoned cart tracking.Easy to use.Metered billing.||People looking to automate invoicing and payment collections.|
|3. Chargify||A centralized place for tracking customer details.Customizable sign-up.Billing portal for easy downgrades and upgrades.Customizable email templates.Revenue Alerts||People looking for automations and workflows.|
|4. Stripe Billing||Customers can manage subscriptions by themselves. Automatic invoice reconciliation.Automatic data forwarding to Netsuite.||People looking for a versatile billing and invoicing software with customizable invoices and dunning management.|
|5. Recurly||Unlimited subscription services.Plenty of billing models. An offers Catalog. Supports one-time and recurring sales.||Mid-market and enterprise businesses looking for a reliable recurring billing system.|
Mid-market and enterprise businesses looking for a reliable recurring billing system.
Other software you may consider are Zuora, Zoho Subscriptions, SaaSOptics, Bilsby, and Cleverbridge.
How ProfitWell subscription management platform checks all of those boxes
There are several subscription management software, but deciding which one to go with can be a hassle. This is why we’d love to recommend ProfitWell to you to make your decision-making process stress-free.
But why ProfitWell, you ask? ProfitWell platform is a comprehensive solution for businesses that offer subscription-based pricing. Below is more reason to consider this subscription management platform!
This feature offers insight into business metrics & helps refine strategy. This way, you can know your business strengths and weaknesses and how to improve your status. More importantly, the data is real-time, accurate, and at no extra cost.
Also, this feature allows you to;
● Benchmark with comparable companies.
● Stay alert with ProfitWell’s mobile app for iOS and Android.
● Audit revenue leakages.
ProfitWell retain feature helps reduce customer churn rate. It’s designed to help you stop losing money through credit card failures.
Also, this feature allows you to;
● Check and analyze your retain performance over time.
● Get an ROI analysis.
ProfitWell recognized feature helps with revenue recognition. Overall, this feature allows you to keep up-to-date and accurate accounting books in real-time. You’ll also understand your business’s financial health and how your subscription services perform.
Find the right subscription management service for you
Subscriptions management is a vital part of every SaaS company’s business model. If you’re not able to facilitate recurring billing payments for your company, that will hurt your relationship with customers and drive down revenue.
A service that fits your specific requirements will help save time, money, and customers. Using the information in this guide, we hope it’s easy to figure out exactly why subscription management service works best for you!
Subscription management FAQs
What is SaaS subscription management?
SaaS subscription management involves automatically managing customers’ payment details and transaction costs to handle recurring revenue and subscriptions.
What are the benefits of SaaS subscription management?
The key benefits of SaaS subscription management are managing payment records and consumer information, payment gateway integration, and contracts and billing automation.
What is the difference between a recurring and non-recurring subscription?
While a recurring subscription is repetitive and billed periodically, a non-recurring subscription isn’t and is only billed once.