How A Subscription Management System Can Make Your Online Business Run Smoother

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September 12, 2022 Business

Managing your online business can be a lot of work. Between responding to customer inquiries, processing orders, and shipping products, there’s always something to do. But, by having a recurring payment system such as a subscription service available, you can minimize the work required in some of these areas.

A subscription management system allows you to manage your customer’s subscriptions and orders automatically, as well as keep track of your inventory and shipping routes. This helps to streamline your business operations and spend less time on administrative tasks while generating a healthy recurring revenue.

Here’s how subscription management software can make your business run smoother.

What is a subscription management system?

A subscription management system is a software solution that helps companies manage customer subscriptions at scale, including invoicing, pricing, communication and more. Most subscription management software providers (for example Chargebee) cover all activities that make up a subscriber’s lifecycle, from signup to upgrades and beyond.

Subscription management platforms can automate pricing experiments and offer free trial management, recurring billing, dunning management, revenue reporting, and customer communication. Handling cancellations, upgrades, and refunds becomes a breeze when you have subscription management software to help you.

Furthermore, this kind of solution supports recurring billing on top of a payment processor (such as Stripe) and enables teams to take actions that cannot be automated. In other words, it enables you to address many of the customer-related queries that arise when payments are recurring. But why do companies require it? When customers return to you week after week, month after month, your relationship transforms from a simple transaction to a lengthy and involved conversation — and that’s where proper management is needed.

Why do you need subscription management software?

The digitalization of businesses continues to grow, including the increase of subscription services with their predictable revenue model and steady cash flow. Every business, irrespective of its size, location, and industry, is trying to capitalize on this trend — but to get ahead of the game, you need to manage your subscriptions in the best way possible.

By automating important tasks, online subscription management and recurring billing software can help subscription businesses thrive. This means you’ll be able to identify and resolve problems as they arise while improving your product or service offering. Simplifying your processes (via automated subscription management) provides a unified view of your business, allowing you to clearly understand each component of the subscription model for continuous improvement and growth opportunities.

Why subscription management really matters

When subscriptions are poorly managed, customers lose trust in the business and will likely stop wanting to deal with them altogether. This could be down to your team being overwhelmed with tasks or simply poor management, but that’s why investing in reliable subscription management software can help.

Here are three scenarios from a typical customer lifecycle when subscription management software really matters:

A new customer signs up: Have they agreed to a trial period? If they are unsure whether to continue using your product after this period, it is your responsibility to make it worthwhile for them. Making people stay after they sign up for a subscription is just as important as getting them to sign up in the first place.

A customer is using your product or services: Customers need a host of billing-related services when they are actively using your product. If they want to upgrade or downgrade in the middle of a recurring billing cycle, you should make this as easy as possible for them. Subscription management software will often let your customers self-serve so they can manage their own changes.

You lose a customer: When you have a recurring billing pricing model, the loss of a paying customer is equal to the Lifetime Value (LTV) of that account, not the loss of a single sale. Because churn has a much greater impact, it is critical to understand what requests were made, how they were handled, and whether recurring billing was supplemented with a layer of subscription management — all of which can be done through subscription management software.

The benefits of using a subscription management system

A subscription management system has many benefits. The ability to build strong, positive relationships with customers is the foundation of any recurring business’s success. With a well-designed subscription management system, every sign-up can be the beginning of something meaningful, rather than an operational headache.

The top benefits include:

Automating mundane tasks

Subscription management software is a great option for automating the mundane yet essential parts of managing subscriptions, such as collecting payment information or general billing adjustments. That means your team can put more time and effort into the operations that require a human touch.

Better customer retention

With subscription management software, you can tailor your communications to your customers. Instead of sending a generic email, you can send customer-specific information about the benefits of their subscription through proactive engagement. You can also create customer programs that reward customers for their patronage by giving them discounts on future purchases.

Improved inventory management

With a subscription management system, you can track inventory in real time. You can also use the inventory management functionality to schedule shipments, create invoices, and keep track of other important business functions.

Clearer financial management

Subscription management systems can automatically track and categorize every transaction made with your business. You can also use the system to track outgoings such as taxes and recurring expenses. By managing things at scale, it’s also easier to identify potential new revenue gaps, either through upselling services or potentially creating new subscription plans and rolling them out using flexible billing.

Better customer service

With a subscription management system, you can create different customer profiles, allowing you to tailor communications to different customers. You can also send automated responses to customers’ inquiries and create customer service tasks such as follow-ups on backorders or complaints.

How to set up a subscription management system

Whether you’re starting a new business or managing an existing one, setting up a subscription management system is key to success. Fortunately, if you use subscription management software you won’t have to hire specialized software developers, as the software can usually be integrated with your website or app pretty easily.

Here are a few things to keep in mind when setting up your subscription management system:

Define your subscription types

Define the different subscription types in your business. You can do this by categorizing your products into different groups so you can clearly see each level and where they fall in your model.

Create custom profiles

Create custom profiles for all your customers. You can use these profiles to track customer information, such as their name, contact information, address, and order information. This is also great for making product or service recommendations based on each customer’s needs.

Make sure your report are set up

If you don’t understand how your subscription management software is assisting you, it’s pointless. A good subscription management software should be able to provide you with detailed analytics about new and existing customers, among other things, so make sure reports and insights are easily accessible.

With a subscription management system, you can better retain customers, manage inventory, and finance your business so cash flow is more efficient. Invest today and gain better control over your subscriptions and valuable insight that will help you grow for years to come!