Easy subscription changes are essential for driving customer satisfaction.
Today’s subscription consumer expects flexibility and an array of options to choose from when selecting a product or service. But they also expect to have the same options and flexibility available after the selection has been made.
Business owners have been hearing the talking points for decades about the incremental cost to acquire a new customer versus keeping an existing customer, but for subscription businesses, keeping existing customers happy is paramount. Customer needs and circumstances change, their desire to switch-up their plan could be based on a need for:
- Usage changes
- Payment frequency changes
- Reduced budget
- Pressure from attractive competitive offerings
- New expectations driven by the industry
- An interest in bundled offers
Regardless of why they are looking to make a change, you can bet that if they can’t easily get what they are looking for from you, they’re talking to your competition. The most successful organizations will be those who are nimble enough to adapt in real time to the changing needs of their individual customers. But, what if your processes don’t allow you to make changes to customer plans in real time while smoothly preserving client information? What if you can’t keep up?
Complete Guide to Subscription Billing.
This guide will walk through the wide range of features required to automate your recurring billing, subscription management, and payment processes.
No time for “manual” in a rapid growth SaaS world
Trying to make on-the-fly subscription changes through manual processes is way more complex than it first appears, and will send your accounting team running for the hills. Each subscription change means a lot of complex accounting adjustments and recalculations on the back-end to reflect correct billing and revenue recognition rules. Proper revenue recognition is about to become even more important in the U.S. with the new ASC 606 Standards taking effect in 2018 for pubic organizations; and 2019 for private companies. The number of adjustments needed to properly transition customer data to a new subscription plan makes it impossible to keep up with manually, especially in a business that has multiple offerings and is experiencing rapid customer growth. Here’s an example of a typical task list associated with managing this process manually:
- The existing subscription(s) must be canceled
- Existing charges must be partially reversed
- New subscriptions created
- Settings and usage from the old subscription need to be migrated (in whole or in part) to the new subscription
- Pro-rated charges for the new subscription must be created
- Back-end systems need to be aligned and adjusted to ensure ledgers are accurate
- Ensure only the net difference between new charges and reversals need to be collected from the client's credit card
High volume manual changes are cumbersome and error-prone, resulting in invoicing mistakes that will reduce customer satisfaction and will reflect negatively on your business. Not to mention, the time and energy required to make changes manually puts undue strain on your accounting department, hijacking resources that could be better directed toward revenue maximization activities.
Automation & Flexibility enable you to maximize your revenue
Providing on-the-fly subscription changes isn’t JUST about maximizing customer satisfaction and minimizing churn. It’s also about capitalizing on any opportunity to upgrade a customer subscription, add new elements and offerings mid-stream, increase usage, anything that enables customers to maximize the value (and their spend) with you. Reporting and analytics provide the insight you need into the buying behavior of your subscriber base and can tell you what subscription changes (upgrades/downgrades) are required to keep existing customers happy and unlock additional revenue. Automation allows these changes to happen seamlessly and accurately. Your customer information is preserved and the subscription data reconciliation between plans takes care of itself.
Realize the full potential of your subscription business with an agile subscription billing and management solution. When evaluating platforms, make sure you choose a system that has powerful subscription change capabilities. Learn more about how Fusebill can put you in the driver’s seat!
Enjoy having the time to read our blogs? Learn how you can spend 80% less time on billing with billing automation. Fusebill simplifies subscription and billing management by automating many manual accounting and financial processes and workflows.