Transforming B2B enterprise SaaS billing with SubscriptionFlow
B2B enterprise SaaS billing has its own complex needs. This blog walks you through the 3 ways an enterprise billing system can help you assess and then improving areas of your workflow in which expenses are piling up and in which there is room for your business to become more efficient. By leveraging this software to optimize your SaaS billing needs you can cut costs while maintaining the market value of your product to grow your profit margins.
Read more: Resolving SaaS Pain Points with the Ultimate SaaS Billing Engine
Why are SaaS Costs Skyrocketing?
When the software-as-a-service model took off, soon markets for purpose-built SaaS started to get saturated. As a result of rising competition in the B2B SaaS space and to stand out to competitors many SMBs have had to invest a lot more into product growth and staying ahead of the curve.
Additionally, customer acquisition costs have skyrocketed increasing the emphasis on customer retention ensuring your existing users are happy, properly serviced, and convinced to maintain a relationship with your business. The result is the cost of SaaS products skyrocketing to keep up with the expenses of running a SaaS startup or SMB.
Approximately, 17% of workers will use a credit card or reimbursement for out-of-pocket costs to pay for a SaaS application. A crucial component of SaaS cost management is identifying areas of improvement. To counter this trend, let us first outline what general steps you should follow to continually suppress costs and grow your value proposition & profit margins.
Read more: SaaS Pricing Trends to Boost Sales & Revenue in 2024
How to Begin Optimizing Your Costs
To achieve this, you need to undertake the following steps:
You have done your part.
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subscription management software.
1. Assessment Profits
You need to first assess the profits generated by your own company, after which you need to look at your competitors to roughly see if your company is doing well compared to them or not. This lets you keep your pricing market competitive while making sure you do not leave cash on the table. Alternatively, you may want to use penetration pricing to poach your competitor’s audience and improve customer acquisition.
2. Take a Look at Expenditures
Now try identifying where your biggest expenditures are and where they can be cut. For this, you will need to audit your company’s workflows, including all one-time and recurring costs to see if there is a problem in any one sector. Maybe the issue is that while you do regularly acquire clients because they do not stick around for long, the high customer acquisition costs are what’s sinking your company.
3. Begin Optimizing Costs for that Particular Measure
Once you have narrowed your focus to a particular cog in your company’s giant wheel, you need to begin modifying it. For this, you might need the help of technical consultants who, for a small fee, will give you a detailed plan of how to go about fixing this issue.
4. Rinse and Repeat
Keep doing this for all components of your company’s workflow till everything has been brushed up to perfection. This will ensure the smooth running of your company and also help generate profits that you can reinvest in your business to help boost growth.
The Role that Effective Pricing Plays to Optimize Costs
It’s all about pricing! Feel free to make use of automated billing software to help you determine just the right prices for your business. Here are some ways you can do just that:
1. Avoid a Pricing Strategy with Additional Costs
This technique entails raising a product’s base cost by a predefined profit margin. For instance, the final cost would be $250 if production costs were $200 and a 25% profit margin was intended. Even though it seems straightforward, this method ignores the pricing strategies of rivals—if your rival can provide lower prices because of things like location or scale that reduce production costs, they might draw clients away from your company. And secondly, this does not allow for individual customer customization, which causes some customers to receive overcharging and others to receive undercharging.
2. Steer Clear of Uniform Pricing
Despite its apparent simplicity, a lot of SaaS providers use this strategy, billing all customers at the same price regardless of features. For the majority of businesses, though, this tactic might not be the best option because it ignores the various needs that various enterprises have, it cannot be used with feature categories that are tier-based. It does not make the most of the potential income from premium subscribers.
Read more: How Your SaaS Pricing Strategy Can Help You Stay Competitive in the Crowded Market
The Benefits of Using an B2B Enterprise SaaS Billing System
1) Billing Needs to be Fully Automated
Enterprise Billing software offers automation to generate invoices, collect payments and program dunning management. Doing this ensures that your workflow’s efficiency improves and also guarantees the customer a seamless experience from checkout to renewal.
2) The Software Must Offer Flexible Pricing and the Choice to Flit Between Different Pricing Models
The best-automated billing software like SubscriptionFlow offers flexible pricing models that you can offer to your customers. Embracing this flexible pricing model approach is the key to unlocking SaaS success.
Doing this ensures that they feel spoilt for choice and keep coming back to your subscription service for more every month. Some of the pricing models that you can make use of are pay-per-use, usage-based, fixed, variable, etc. If you include a subscription plan that your consumer can customize according to their needs, this ensures that they might stick around with your service for longer.
3) Must Offer Strategies for the Reduction of Churn
This is non-negotiable. A robust automated SaaS billing software for B2B needs to include within its suite of features the option to segment your customers, send them highly tailored offers on the basis of that segmentation, and even tools for subscription that will help markedly lower churn.
One of the ways in which all this works is that you can use the enterprise billing system to mark out those customers who are at risk of churning, and then send them promotions or tailored discounts to help retain them.
Bottom line
If you want your business to succeed, you will need to ensure that it does not have leakages which stop its speed as it moves ahead at full pace. This is where cost optimization becomes necessary because it is a way of ensuring that there are not any leakages in the cash flow of your business that is preventing you from achieving new heights.
With SubscriptionFlow B2B enterprise SaaS billing software you can do all this and more! It is a robust billing and subscription-management software that can help you in achieving all that we have just discussed in this blog. Book a demo with SubscriptionFlow now to begin your journey!
