Key Challenges and Solutions of B2B Subscription Management in 2024
2024 has brought with it a change in B2B subscription management. Owing to general developments in technology (with a special emphasis on AI), we have seen a marked uptick in businesses relying on metrics of subscription management like MRR and ARR. Naturally, this has had an effect on B2B billing as well which we will gauge with in this blog alongside looking at the challenges and their solutions that these changes bring.
An Overview of B2B Subscription Management in 2024
Rise of AI
Owing to increasing automation, we have seen businesses investing more and more in software that streamline their workflow and make them dependent less and less on human labor. This is owing to larger trends in the world where businesses are relying on AI more than humans to cut costs, increase efficiency, and outsource menial jobs that can be easily carried out by AI bots without issues of quality control arising.
Personalization
Another trend that has emerged in 2024 is that end consumers of B2B businesses are demanding ever more personalization from their subscription offerings. The idea is that if you will be paying regular payments, you better be getting extremely personalized services that are tailored to best suit your individual needs and demands. This demand for personalization can vary from consumers wanting something as small as choosing their own date of billing versus something as large as wanting to choose which individual features are they paying for in a SaaS software they may be licensing. This allows them to cut costs on features they will not be using.
Are B2B SaaS subscription management solutions meeting these demands?
Understanding AI-driven Personalization in B2B Subscription Management
1. Data-driven customer retention
AI has become an important tool to especially help improve levels of a customer’s satisfaction with your business. Focusing on this metric helps you retain customers. The way AI can help you in this matter is that it can allow for an improved collection, streamlining and even processing of data to allow for you to better understand your consumer’s purchasing patterns, among other things.
2. Diversifying Pricing
It is a fact that customers like to have a variety of pricing options that they can choose from (rather than having you choose a particular pricing option for them). This need of the customer is helped by AI tools as using them you can better gauge with your customer’s shopping capacity as well as purchasing pattern to see what style may better suit them. A robust subscription management software like SubscriptionFlow will then automatically provide this option to your consumer for them to choose to pay for your subscription.
3. Collecting feedback using AI
This is a tricky one. While it is true that AI can help you acquire and process lots of feedback, it is also true that when providing feedback, customers prefer having a human to communicate to rather than an AI bot. This is where feedback segmentation comes into play. You can divide the kinds of feedback your customer can give into two categories. If it is something a little generic or an unimportant, minor issue is being flagged, that can be handed over to an AI bot. On the other hand, for more detailed feedback and queries it is still best to rely on human labor to do the task as the customer responds positively to it.
Understanding the challenges of implementing AI-driven personalization
1. Algorithms can be biased
Algorithms can be extremely biased. Just ask the billions of Instagram users who are categorized as per their sex, class, ethnicity etc. when the algorithm shows them content that corroborates to these identities. To escape this, it is highly advised for businesses to now instantly jump on the AI bandwagon and to slowly allow their business to make the shift. This will help them retain crucial human labor that will help temper the AI bias.
2. Difficult to integrate with other systems
AI has been implemented by some subscription management solutions, yet that is not the case with most of them. Using such a high-end solution may put you at a disadvantage in the short term where you will struggle to either integrate your workflow with other software for other tasks or, if you do integrate, the integration will not be as beneficial. This is because these other software will not be able to make efficient use of your workflow’s AI capabilities.
3. Requires continual optimization
This is the thing with technology that it requires continual updates. And this is especially true of AI that in itself is a rapidly evolving technology which even its own creators have not yet fully understood. Using AI-capable software to manage your subscriptions will therefore have the negative effect of you constantly having to invest in technical human labor that is technologically literate enough to not only manage this fast evolving technology but also savvy enough to keep abreast of its updates.
4. It is prohibitively expensive (at least for now)
All these things, on top of the generally expensive nature of AI production, will surely balloon your operating costs. Ironically, for the time being at least AI will end up increasing your costs rather than cutting it.
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subscription management software.
To avoid this, and unless you have very deep pockets, it may be best to sit out the AI revolution for the time being until at least the sheen of the technology’s novelty wears off and it becomes cheaper.
5. It may be unethical
It is important to grow your business ethically. And there is a big debate going on about how ethical the usage of AI is since it is taught using data produced by humans whose consent is not always taken before feeding their data to train the AI model. This ought to be a problem for businesses who are interested in being ethical more than they are in generating profits. (Fortunately, hardly any business does that.)
Bottom line
AI is a fantastic tool and it is the next big thing for B2B subscription management in 2024. It offers endless advantages for those who are tech-savvy and wealthy enough to afford it. But because most small and many medium-sized businesses do not fall in that category, this is why it may be important for you to sit out the AI revolution for the time being and instead invest in software that utilize other aspects of subscription management to drive growth.
Book a demo with SubscriptionFlow now and see for yourself how even without AI a subscription management software can provide robust solutions!
