Continuing on its upwards trajectory, the global market value of the subscription economy reached $292 billion in 2022 – up from $224 billion in 2021. What does 2023 hold in store for subscription-based organizations? According to consumer surveys, the competitive nature of the industry will be at an all-time high in 2023. With increasingly fierce competition, how can subscription companies outpace the competition and remain relevant to subscribers? Even more importantly, what subscription management software features should users expect to see?
In what has become a rapidly transforming and increasingly competitive landscape, traditional pricing and billing models pose significant growth risk. Additionally, the changing dynamics of the industry requires subscription-based enterprises to quickly pivot – whether that’s products and services, bundles and packages, special offers, pricing schemes, etc. The ability to efficiently and cost-effectively react to market demands relies on having a robust solution with customer-centric subscription management software features.
What is a Subscription Management Platform?
Subscription management software is designed to manage recurring billing to ensure that the right amount is charged to the right company (or individual) the correct number of times a year (monthly, quarterly, annually, customer preferred). This type of software automates repetitive tasks such as generating invoices for the subscription plans offered and billing frequency selected by the subscriber. It also manages traditional subscription offers, as well as packages, bundles, discounts, promotions, etc. to ensure invoicing accuracy.
While this describes the basic functionality of subscription management software, some subscription management software vendors offer advanced tools and features that enhance the functions of your entire revenue operations. This provides the opportunity to reduce manual effort, plug revenue leaks, maximize revenue potential and deliver exceptional customer experiences.
Subscription Management Software Features and Functionality Must Haves
Subscription management software features vary greatly from vendor to vendor, making it essential to know and understand what’s available and the functionality your company needs to optimize operations. From essential features to innovative functionality, we’ll explore the six features you should consider.
1) Billing automation
While subscription management software features like automation may sound like a given, you need the ability to automate more than just the invoicing process. The right subscription management software platform should include a billing automation workflow engine, provide the ability to automatically send notifications to customers, and automatically generate documents. Let’s look at each of these in a bit more detail.
- Billing automation workflow engine – The workflow engine needs to fully integrate into every aspect of the application so you can easily set up and orchestrate billing automation workflows that involve multiple steps. This enables your finance teams to execute billing processes at scale, maximize productivity, and minimize manual effort.
- Customer notifications – When critical events happen, you need the ability to send alerts and notifications quickly and effortlessly. A sophisticated subscription management software solution enables you to send customers automated notifications for missed payments, collection attempts/reattempts, when credit/debit cards have expired or been declined, subscription expiration warnings, upcoming credit/debit card expiration notifications, and when a customer is approaching pre-defined contractual thresholds. The software should provide for the alerts to be displaced on the home screen or emailed to the subscriber. This gives them the opportunity to take immediate action.
- Document generation – Whether you want to generate welcome documents for new accounts, include supporting documents when sending PDF invoices, generate and send credit memos, or send documents to customers triggered from custom objects created in the platform, the subscription management software should provide the capability to dynamically generate and populate PDFs, XLS, or word documents with application data, allow the use of templates, and automatically deliver the document. Additionally, you should be able to monitor document generation processes that are running in the subscription management system for a real-time view of processes running, execution status, and work that is pending.
2) Product catalog
If your subscription-based business is like that of the majority of your peers, you’re offering many things. Multiple products/services and product lines, managing a variety of pricing schemes – flat fee, tiered pricing, per seat/user/unit pricing, usage/metered pricing, per feature pricing, dynamic pricing, hybrid pricing, freemium, and free trials, as well as handling recurring/non-recurring charges, a variety of billing frequencies, and possibly different currencies. These complexities require a single product catalog that enables you to easily define pricing, promotions, and discounting rules. This way you can bring new products and services to market faster than the competition.
When it comes to subscription management software features, an agile product catalog provides the ability to deploy and manage pricing for physical or digital products, services, metered usage, or recurring revenue offerings and apply dependencies. Thresholds control how and what is sold while the catalog also provides the flexibility to quickly deploy and easily manage innovative pricing for any product or service. You should also be able to generate new revenue streams from any combination of one-time charges, subscription, consumption, hybrid, etc. The efficiency boost of having these features all on a single platform is hard to comprehend!
3) Compliance and security
In today’s market, regulatory compliance and data security are non-negotiables. The subscription management software platform needs to provide the ability to tailor billing practices across all domestic and international business units in accordance with current standards. This ensures your subscription business’ revenue recognition aligns with ASC 606 and IFRS 15; helps maintain internal controls over financial reporting and the privacy of customer data with SOC 1 & 2 compliance; and secures customers’ payment and personal information with compliance to PCI and GDPR. Additionally, the system should provide enterprise-grade security that continuously monitors for malicious activity and unauthorized behavior, monitors traffic for abnormal activity, provides multi-factor authentication, and includes a source code review process to help identify, prioritize, and resolve issues. Finally, be sure the system follows the PCE security standard for credit card payment processing and offers the DKIM protocol for the sending of emails from the subscription management system.
4) Seamless integration
Creating a single source of truth and an end-to-end financial ecosystem requires seamless integration of the subscription management platform to existing tech stacks. A straightforward approach to integration is using application programming interfaces (APIs). This approach lets you build a fully integrated ecosystem of critical enterprise applications with limitless billing integration capabilities, bi-directional configuration, and data syncing. Another integration option – enterprise connectors – allows you to integrate with multiple external systems using preloaded and pre-built connectors, enabling you to synchronize data between systems – billing, customer relationship management (CRM), general ledger, tax solutions, enterprise resource planning (ERP), business process management (BPM), etc. All without the need for internal development.
5) Reporting and insights
By monitoring key metrics such as monthly recurring revenue (MRR), annual recurring revenue (ARR), churn rates, customer acquisition cost (CAC), customer lifetime value (CLV), and renewal rates, the subscription management software solution can provide a wealth of information. With access to granular data, finance teams can assess the health of your subscription business from multiple perspectives such as product, sales, marketing, finance, and customer retention. There are three subscription management software features you should expect – reports that enable you to easily manipulate data, apply filters, create pivot tables, and automate complex calculations; dashboards to create powerful and customizable role-based views for real-time information, charts, and graphs that provide relevant insights at a glance; and advanced analytics for the ability to execute analytics on any data element in the solution for insights to optimize billing performance and drive business success.
6) Payment options
You may already be offering a variety of electronic and manual payment methods such as debit/credit card, PayPal, direct debit, and lockbox that are available through hosted payment pages, the subscription management software’s customer portal, or through agent assisted transactions. What about other payment options or adding new payment partners? With an API-based common integration framework, you’ll be able to onboard payment gateway providers quickly and easily. Additionally, the subscription management software solution should monitor the full payment journey – from payment initialization and tokenization through payment processing and settlement to chargeback notifications.
While the subscription management software features and functionality described above are some of the most desirable to scale your subscription-based business, additional features and functionally that your business may need depends on many factors. These include the size of your business, whether you’re just starting out or a veteran subscription-based business, growth goals, etc.
Take Your Subscription Management Business to the Next Level
Driving the financial hub of your business, subscription management software features provide the functionality necessary to handle all financial processes quickly and efficiently. Regardless of the billing strategies you have set for the coming year, improving productivity and automating tasks will help turn strategic plans into achievable goals.
BillingPlatform’s cloud-based billing solution provides everything you need to reduce manual effort and errors, maximize revenue potential, and provide the experiences subscribers expect. If you’re ready to do all this and more:
- Automate collections, dunning, approvals, invoicing, notifications, etc.
- Send invoices based on customer-centric cycles and settings
- Automate accounts receivable
- Track late payments and alert customers when delinquent
- Implement automated retry logic for expired credit/debit cards
- Create automatic notifications when cards are declined
- Generate accurate financial reports with rules-based or tailored workflows
It’s time to get in touch with the team at BillingPlatform. With us you get a subscription management software solution that was built to handle not today’s requirements but has the agility to support the continuing evolution of subscription business models. Are you ready to optimize your 2023 billing strategy… increase revenue potential… and deliver the kind of experiences that fosters customer loyalty? We’re ready to help.