Subscription management is the act of supervising and regulating all elements of products and services that are offered on a weekly, monthly, quarterly, or annual basis through a subscription-based pricing model. For businesses providing such subscription products, subscription management software can be very useful as it ensures that the proper amount of money is charged to the right customer the right number of times annually.
Benefits of Subscription Management
Subscription management can help businesses get a higher return on investment during marketing campaigns that include discounts, coupons, or free trials and aid organizations in managing subscription fraud.
This program can also aid in the improvement of a company’s relationship with its subscribers. When a client returns to a business frequently, the relationship evolves into an extended discussion rather than a simple transaction. Customer retention is critical here. When monthly recurring revenue (MRR) drives growth, retention becomes one of the most closely monitored metrics in a company, and thus subscription management becomes more important.
Subscription management can often be confused with other finance-related actions. So, for clarification, these are NOT what subscription management is:
Recurring Billing: A bill is generally described as a printed or written statement of the money due for products or services. In its most basic form, it handles invoice accounting for elements like proration and local taxes. Recurring billing is an automatic procedure that involves the customer, the merchant, and a method to keep track of a recurring transaction between the two.
Recurring Payment Processing: It entails maintaining sensitive payment data and allowing the safe transmission of payments between the client and the merchant. Stripe, PayPal, and Braintree are some well-known payment processors.
Subscription management is important in these two scenarios:
A Client Registers
Have they agreed to a trial period? Are your customer support representatives authorized to prolong the trial term if the customers are unsure whether to continue using your product beyond this period? Making customers remain after they sign up for a subscription is just as essential as getting them to sign up from the start.
A Client Departs
When you have a recurring billing price plan, the loss of a paying client is equal to the loss of the Lifetime Value (LTV) of that account and not of a single sale. And, since churn has a considerably more significant impact, it is critical to determine what requests were made, how they were handled, and whether recurring billing was supplemented with a layering of subscription management.
A subscription management system operates atop a payment processor to provide recurring payments and allows teams to perform non-automated actions.
But why are corporations in need of it? When consumers come to you week after week, month after month, your connection transforms from a simple transaction to a lengthy and engaged relationship. In other terms, it enables you to address many of the customer-related tasks that arise when payments are recurring.
Recurring billing and subscription management are inextricably linked, with one providing automation and intelligence and the other providing flexibility and more control.
When subscriptions are poorly handled, customers lose faith in the company and cease to do business with them. Hence, the best you can do is demonstrate that payments are handled safely, responsively, and seamlessly on the business end, and consumers will forget about invoicing and instead focus on the value and experience you give.
The capacity to develop strong, positive connections with consumers is the foundation of any recurring business’s success. And for that, subscription management software can be a real help. Every sign-up may be the start of something great, and if you want to extend that relationship, a business needs a top-notch subscription management system.
