What is B2B subscription management?

July 01, 2021

Introduced in the 1600s by newspaper and magazine publishers, we’re all familiar with the subscription-based business model. In fact, if you’re like most consumers you have at least a few subscriptions for products and services like gym memberships, food or wine delivery, music and video downloads, or even shaving products and cologne. We’ve become so accustomed to the subscription economy, that many of us take it for granted. With the success subscription-based companies have had over the centuries, it’s a wonder why it’s been primarily limited to the B2C market. That is until now  – B2B subscription management is not only making an entrance but growing at a rapid pace. In fact, anything as a service (XaaS) products is expected to reach $344.3 billion by 2024, with a 24% CAGR.

The Subscription Management Landscape is Changing

Unlike their B2C counterparts, B2B subscription management is much more complicated and encompassing. For many companies, it will include virtually every department in the organization. From sales and marketing through product delivery and deployment, to vendor management, customer support and more. Not only will it touch nearly every aspect of your business, but you’ll also need to take into consideration technology, systems integration, user provisioning, etc. You may be thinking… is it worth it? The answer is a resounding yes!

To start, B2B subscription management delivers a lot of the same benefits as a recurring revenue model, which provides advantages to both the customer and the business. What this means is that your business customers receive predictable cost, reduced OPEX and CAPEX, and the ability to try your offerings without a large outlay of cash. On your side of the coin, you’ll gain a more steady and predictable revenue stream, reduce your administrative costs, achieve higher business valuation, and develop competitive differentiation. Let’s look at how two companies are crossing the chasm to become B2B subscription providers.

United Technologies

United Technologies, who are known for brands such as Otis Elevator Company, Pratt & Whitney, and Carrier, are using the internet of things (IoT) to monetize its data and analytics. For the Otis Elevator Company, this means that Otis customers can now enroll in proactive subscription maintenance plans. Likewise, other United Technology companies now capture data from planes that are in flight. This proactively alerts the airline if maintenance is needed, and automatically sends an order for required parts. All of which gets delivered to the maintenance crew before the plane even reaches its destination.


Taking a similar approach, Michelin is gathering data using sophisticated sensor technology that’s embedded into its tires. The information acquired helps to better understand tire utilization under a variety of road, load, and weather conditions. They then use this information to create subscription maintenance contracts, which helps their transport company customers improve efficiency and vehicle uptime.

Not your run-of-the-mill subscription offerings to be sure. What both of these examples have in common is in their ability to think outside of the box and apply technology to create new subscription-based offerings.

If you think your company is poised to adopt a B2B subscription management business model, read on to see what you need in place before beginning.

Becoming a B2B Subscription Management Company

While not adopting a B2B subscription business model fast enough can pose competitive risks, you need to ensure that your company is ready for the sweeping changes it brings. At the top of the list is ensuring that your billing system can handle a subscription-based business model. To efficiently and accurately bill your subscribers, your billing platform needs the ability to:

With a better understanding of what is required of a billing system, there’s an even more pressing concern that many B2B subscription companies don’t take into consideration – your end-to-end quote-to-cash (QTC) processes.

Why QTC is Essential for the Success of Your B2B Subscription Business

As explained by McKinsey & Company, “B2B subscription businesses that optimize their QTC processes have greater success in adding new accounts, growing new accounts, and reducing churn. As a result, these high-performing companies grow their annual recurring revenue (ARR) at four times the rate of others.” What about B2B subscription businesses that don’t onboard a QTC solution?

McKinsey details the issues that a financial technology company experienced just six months into their B2B subscription launch. Here’s a sampling of some of their struggles:

  • Inundated by bottlenecks, the process required approximately 200 emails to move a quote to an invoice
  • Sales generated quotes manually
  • Their entitlements system was unable to store subscription information
  • Handling invoicing manually
  • Salespeople needed to take their deals through multiple functional teams
  • Inability to scale put growth plans on hold

So, what did this organization do? Ultimately they had to retrace their steps and develop QTC processes.

Set B2B Subscription Management Up for Success

You don’t want to leave the success of your B2B subscription business to chance. Without the right billing solution and well-thought-out QTC processes, you’ll be at risk of slowing the sales cycle, delivering poor customer experiences, and inhibiting growth.

BillingPlatform can help you manage the inherent complexities of B2B subscription management. Our platform unifies your data to configure, price, quote, bill, and manage your revenue. With unrivaled expertise, we help B2B organizations deliver fast and seamless experiences customized to meet business customer needs. Talk to a member of our team today to learn more.

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