Best Practices for Streamlining SaaS Subscription Billing
There was a time when Nokia was the largest manufacturer of mobile phones. However, it could not compete with companies that introduced smartphones so it ended up selling to Microsoft.
Kodak was also a market leader in manufacturing cameras, but it failed to cope with digital photography which led to its bankruptcy.
MySpace was the dominant social networking site. The rise of Facebook and other social media platforms led to a decline in MySpace’s popularity, ultimately leading to its sale.
The point that we want our readers to understand is the market shift is not abrupt, but when it happens, only those companies can survive that are adaptive to changes.
Small changes in the market today are the biggest indicator of what is going to happen tomorrow.
As a subscription business retailer, you need to keep an eye on daily, weekly, and monthly trends that the KPIs show and opt for the best practices that can ensure your survival and sustainable growth.
Here we are with the SaaS subscription billing best practices that will help you not only survive but thrive and grow with the changes in the subscription business market.
Also Read: SaaS Subscription Business Trends That You Need to Pay Heed To
1. Monetization Shift
Just like business model shifts, there are monetization shifts. For instance, many eCommerce platforms have shifted to the recurring billing business model though previously they were working on one-time sales.
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So, the shift in the monetization strategies in the subscription business market is based on the focus on consumption rather than subscriptions. The focus of subscription businesses is often on consumption rather than subscriptions because consumption is a more accurate indicator of customer engagement and the value that the subscription is providing.
Subscription, on the other hand, can show the interest of customers in your subscription plans, however, it can never indicate accurately the product value. It is high time to move to value-based pricing which a retailer cannot think of doing if the point of focus is the subscription.
An ecosystem where monetization needs to be done is the most important factor to monetize subscriptions, and today the ecosystem is shifting to value-based pricing.
A subscription monetization strategy that is based on consumption patterns makes customers happier and results in a better retention rate.
2. Onboard Chief Subscription Officer (CSO)
Now that many businesses that previously were not on subscription billing business models are opting for it, they must onboard Chief Subscription Officers (CSOs).
Why all of a sudden do we recommend you to have a professional resource to run your subscription business seamlessly?
Well, the market is competitive. And only a professional SCO can make such subscription business strategies that will work for years. For sustainable recurring billing business growth, you will need a CSO that can take care of everything from developing subscriber personas to analyzing data and developing customer-centric add-ons.
3. Strategy Shift: Retention Is Acquisition
As a retailer, you monetize the recurrent need of the customer. And to make the same customer come again for purchase admit that retention is acquisition in this business. No matter how many customers you acquire, if your customer base is leaky, then you cannot expect to scale and grow.
Statistics show that 98% of recurring revenue is brought for a subscription business by the subscribers that it had at the start of the year.
That indicates that customer satisfaction and retention is the key to the success of a subscription business.
Also Read: What Is The Relationship Between Customer Retention And CLV: A North Star Metric For Your Business
4. Sustainable Subscription Business Growth
Today, businesses not only target growth but they also want sustainable growth. It has become a trend to utilize resources in a way that your business achieves revenue targets today and continues improving and meeting targets in the long run. Also, sustainable growth is not just about increasing revenue and customer base, but also about managing the costs of customer acquisition and retention, reducing waste, and maintaining a positive relationship with customers.
As a leading practice in the SaaS subscription business market, a business strategy focused on sustainable growth can benefit in the long run.
5. Hybrid Billing Model
Coming towards the leading billing model in the subscription business market these days, which is the hybrid billing model. We are all aware miscellaneous businesses and retailers are even now entering the already competitive subscription business model. These varying businesses can never operate by opting for a single billing model. The biggest attraction to the subscription business model is the diverse customer base that diversifies the revenue stream.
The hybrid billing model combines two or more billing models as per the subscription business needs of the retailer so that the end customer will be able to pay the way they want. By offering flexible and personalized billing options, businesses can attract and retain a wider range of customers, while also driving revenue growth and improving customer satisfaction.
It is for sure that as a retailer, you must keep an eye on the ongoing trends of the subscription business market. However, do not jump on the bandwagon. Follow the trends that can benefit your subscription business and SaaS billing process.
However, no matter what are the trends, SubscriptionFlow is the subscription management platform that will help you cope with subscription billing best practices.
schedule a demo now to see how SubscriptionFlow empowers recurring billing businesses to go with the trends.
