Having a subscription business is one of the best to run. They offer you a significant number of advantages and are a great way for consumers to gain access to software, information or products that might usually be out of their price range.
Yet there are a numerous challenges that businesses operating under the subscription model face. Here are seven of those challenges.
1. Customer Management
Subscription businesses tend to have a significant number of users at any one time. This can be hard for the business to manage with all the customer records that are needed. An inaccurate customer management database can damage relations because mistakes are made. These mistakes can be down to staff not knowing what level of service customers have, whether they are on a trial or when their subscription period ends.
To avoid this, you need to utilise an effective customer database that can categorise where in the sales process an individual is and previous interactions they have had with your company. It should also track the current status for a customer’s membership.
2. Automatic Invoicing
With numerous customers signed up to the services of a subscription based business, manual invoicing becomes troublesome. Invoicing becomes an even bigger problem if you have customers on different payment options, subscription levels or with add-ons.
One of the best ways to solve this is to use an automatic invoicing system that can use your customer database to automatically generate and distribute your invoices. This can also be implemented when your customer purchases a subscription for the first time and for when customers cancel their subscription.
3. Secure Payments
One of the biggest challenges subscription businesses face is the security of their customers’ payments. If subscription businesses cannot offer guarantees that their payment system is secure, customers are unlikely to sign-up for membership.
4. Pricing Plan Management
Most subscription businesses have different levels of service. Dollar Shave Club for instance have three different types of subscription and some SaaS companies have many more. Different subscription levels are a great business strategy and likely to grow your business as it offers more affordability or choice to the consumer.
This can make recurring billing difficult to manage. To combat this complexity, you need to utilise an effective recurring billing software program that will manage pricing changes with ease.
5. Failed Transactions Management
With so many customers subscribed to the business, it can be difficult to notice when a failed transaction has taken place. It is an ineffective use of your time to go through the list of transactions manually to check everyone. This task is almost impossible if you have hundreds or thousands of customers.
Therefore, businesses need a way to automatically highlight when transactions have not been processed and to inform customers of failure. From there, the payment system can automatically resolve the issue by finding a solution for payment to be made or to cut off the customer so they don’t get access to the products / services until the payment has been made.
6. Discounts And Promotions Management
To grow, subscription businesses may require special promotions and discounts to entice target audiences to sign-up. This can be tough to manage manually and would require significant work that can make implementation financially ineffective. By using an effective subscription billing model, businesses can track the number of discounts redeemed and the effectiveness of the marketing efforts as well as seamlessly manage the billing.
7. Multi-Currency and Language Support
While some subscription businesses only offer their products to customers in one country, those offering subscription or content services can often be global. This can cause numerous problems with billing customers, whose charges may fluctuate with exchange rates or can’t read the bill because of language problems.
A good subscription billing system should be able to manage the invoicing no matter what country the customer is located.
There are numerous challenges that subscription businesses face while setting up their services and maintaining their customer relations. One of the only ways that businesses can overcome this is by using an effective recurring payment system that can address these issues.