Cloud services continue to evolve for businesses large and small (no matter the industry). This environment features many benefits like improved performance and high availability, business continuity, centralized data security, and cost savings. While the cloud has been adopted for many internal processes, billing and more specifically subscription management are only just beginning to embrace cloud-based subscription management and its benefits.
Why Cloud-Based Subscription Management?
From when a customer signs up to ‘subscribe’ until cancellation, subscription management encompasses all aspects of the subscription lifecycle. This business model focuses more on customer retention than new customer acquisition. Cloud-based subscription management consists of many automated processes including approvals, generating invoices, and collecting payments. There are also manual (or semi-manual) processes like order changes, product/service pauses, mid-cycle subscription changes, and customer service.
Given that success and profitability rely on the longevity of customers, this multi-faceted sales strategy requires the efficient and accurate handling of all customer interactions. When glitches occur, customers lose trust and could churn which results in a revenue loss. Getting it right requires time, effort, and resources – which is in short supply for many companies.
Essentially, businesses have two choices:
- Keep the operation of subscription management local
- Move this essential business process to the cloud
Cloud-based subscription management software enables businesses to automatically handle many of the processes such as quoting, subscription, renewals, recurring billing, collections, and revenue recognition. This software assists organizations in various ways. Firstly, it helps them create packages, upsells, and cross-sells.
It also enables them to set prices and payment terms. Moreover, it allows them to send personalized invoices. Additionally, it helps them combine renewals and announce new services quickly.
Let’s delve a bit deeper into the benefits of cloud-based subscription management.
Cloud-Based Subscription Management: Benefits
The advantages of cloud-based subscription management fall into three categories – financial, business and customer.
Financial Benefits
1) Revenue Predictability: Subscription pricing provides higher levels of revenue predictability that can accurately forecast financial performance and help you allocate resources.
2) Hardware Optimization: Since the servers are off premise, you won’t incur hardware costs. Additionally, hardware usage fluctuations typically require redundant in-house servers. Transitioning subscription management to the cloud means you receive scalable services to meet fluctuating capacity demands – without added expenses.
3) Setup and Ongoing Expenses: When kept in house, subscription management requires you to buy equipment and set up an internal IT infrastructure. Over time, planned and unexpected expenses from ongoing maintenance, operations and upgrades will occur. However, the cloud provides a cost-effective alternative, handling maintenance with a minimal cost, and reducing capital expenditures.
4) Internal IT: Keeping on-premise subscription management systems operational requires a team of highly skilled IT professionals. This can result in a sizable outlay of cash such as the expenses incurred for hiring, training, salaries, and benefits. On the other hand, shifting to the cloud reduces the need for a team of IT specialists. Software updates are remotely implemented and tested in advance, and hardware maintenance is routinely performed.
5) Energy Costs: In-house conventional servers consume massive amounts of energy. By moving subscription management to the cloud you’ll save considerably on energy bills, and make a significant impact on your sustainability goals.
Business Benefits
1) Artificial Intelligence (AI): With many cloud-based subscription management solutions offering AI capabilities, you’ll improve productivity across the organization – finance, accounting, marketing, sales and customer service.
2) Integration: Whether through APIs or pre-built connectors, you’re able to seamlessly integrate your cloud-based subscription management solution with other critical front- and back-office systems to create a financial ecosystem that dramatically reduces errors and revenue leaks.
3) Data: Cloud-based subscription management systems collect detailed customer data that enables you to improve forecasting and personalize marketing strategies for each subscription.
4) Automation: Since the software works in the background, managing customer subscriptions and handling billing processes requires little to no manual effort. This frees your resources from mundane and repetitive tasks so they can focus on other critical business aspects.
5) Security: Data breaches and other cybercrimes continue to rise in frequency and severity. Cloud computing offers advanced security procedures and technology to address external and internal threats, minimizing security risks.
6) System Downtime: When handling subscription management processes, downtime is detrimental. With a cloud-based system, you not only receive improved uptime, but it saves you money on fixing the issues related to the downtime.
7) Customer Relationships: Inherent to this business model, company’s build stronger customer relationships and reduce customer churn through greater value creation.
Customers Benefits
1) Customer Options: Different pricing tiers and payment plans provide customers with product and services choices, as well as offers low-barrier entry.
2) Subscription Process: Cloud-based subscription management software simplifies the subscription process, enabling customers to easily sign up, manage, modify, and cancel their subscriptions.
3) Payment Options: The subscription management solution provides for a wide variety of multi-currency, regional-specific secure payment options, including debit/credit card, checks, PayPal, direct debit, lockbox, and hosted payment pages to support any payment need.
4) Customer Experience: Exceed customer expectations and retain subscribers with a self-service customer portal that provides 24 x 7 access, empowering customers to serve themselves.
With so many benefits, it’s clear why many companies are moving from in-house and manual processes to automated cloud-based subscription management solutions.
Is Your Business Ready for Cloud-Based Subscription Management?
What can a cloud-based subscription management solution do for you? Aside from delivering numerous benefits, the right subscription management solution enables you to better monetize your products and services, and deliver the experiences that drive customer loyalty.
BillingPlatform’s cloud-based subscription management solution gives you the tools you need to eliminate issues that plague companies that maintain on-premise subscription management. You can grow revenue by complementing subscription models with innovative metered and usage-based pricing, and shift your focus from manually handling subscription management tasks to revenue-generating opportunities. Our implementation is straightforward, helping you to begin reaping its benefits in as little as 8 weeks.
Are you ready to join the growing number of businesses that are swapping in-house processes in favor of cloud-based subscription management? Our team is ready to help, reach out to talk to our experts today.
