Zoura coined the phrase, “the Subscription Economy”, which describes a new business landscape where traditional pay-per-product/service businesses are shifting towards subscription-based business models. This change has been perceived throughout the global market, which has fundamentally brought changes in the way businesses operate. As shifting to the subscription economy is synonymous with taking a completely different approach to building your business.
However, this change is for the better as research has shown that the subscription economy is here to stay and it is a well-received model by Wall Street.
However, despite the transition to the subscription economy seeming a complicated process, as a business you can take help from subscription management software, which will smoothen the process of transitioning into the subscription economy.
But the question that arises is, is the subscription economy suited for all business types and why should you bring change or build your business to sustain in this economy?
Before we answer this question, let’s take a step back and first understand what the subscription economy and subscription management software is.
What is the Subscription Economy and Subscription Management Software?
The subscription economy is an umbrella term that indicates the trend of businesses to shift from a traditional pay-per-product model to a subscription model. The subscription model, on the other hand, includes selling recurring subscriptions to customers in exchange for access to products, services, or content for a specific time frame.
Subscription management software, on the other hand, is a solution that works over a payment processor, which supports recurring billing. In other words, The name SaaS (software as a service) is synonymous with subscription management software. SaaS is provided as a feature by many software-providing businesses, which you can use to transition easily into the subscription economy. SaaS is a cloud-based subscription service, How Subscription Management Software Reshapes Businesses
Using subscription management software to transition to the subscription economy will foundationally and operationally change different areas in your company.
These changes in return will reshape your business.
- Change the Pricing model
Unlike the pay-per-product/service pricing model, the subscription economy’s business model can be complex. To develop the pricing model in this economy you will first have to select the unit economics, then calculate direct revenues and cost that will be needed to profit on a per-unit basis.
Furthermore, it will also be needed to choose billing periods, identify appropriate price models and create different packages based on customer segments. Also, you will have to bill for new customers, and if they sign up in between a month, you will have to charge a prorated amount, and bill customers at the point of renewal regarding billing cycles and as per consumed service.
Apart from these complications, the heavy shifting of business into this economy raises the question, how do you make your prices competitive?
All these complexities and questions can be catered to with subscription management software. Subscription management software will work with your payment processor for supporting recording willingness and addressing customer-related actions that might occur during recurring payments. Besides, if you implement proper subscription management software it will help you by generating accurate, user-friendly, and well-designed bills for new and existing customers.
- Improve Customer Experience
Implementation of proper subscription management software will help you track and manage all activities related to the sale of subscription-based products and services, which in return will improve the customer experience while increasing options available for customers along with affordability. It will also reduce the time needed by your teams to manually integrate the billing process, which will reduce human errors as subscription management software automates processes.
- Increase Flexibility
Using subscription management software will increase customer options as this software provides businesses the opportunity to offer bespoke subscriptions based on customer preferences and past purchases. Thus, the customizable experience will increase the compatibility of your organization.
- Increase Payment Accommodation
Some subscription management software has the capacity of going beyond accepting payments from popular credit card companies. A well-integrated subscription management software can take payments from digital wallets, interact with Venmo/PayPal and even accept Bitcoin. As a result, it will increase your capacity of providing options for customers to pay, which will reduce the number of cold sales.
- Secure storage
Customer subscription is synonymous with payments and an unsecured service will violate the trust of buyers. According to a report, most customers do not store their payment information due to security concerns over online platforms. However, if your customers do not share their data, the recurring billing process or repeated purchases will become cumbersome.
But adequate subscription management software will be able to provide you with the security of storing sensitive information efficiently while giving the protection, which you can list for your customers clearly to gain their trust and make the recurring purchase and billing process easy.
- Provide seamless automation
An appropriate subscription management software will also provide seamless automation to your business by running in the background while managing customer subscriptions and handling billing processes without direct supervision. This automation will reshape your business, as it will allow your teams to focus on other critical tasks like training customer support or developing new products and services.
Regardless of the high technical changes that would be needed to transition into the subscription economy, you will be able to benefit in many ways. However, an operational shift to this magnitude dictates the need for long-term change across your entire sales organization to drive consistent adoption.
Thus, it is recommended that you choose an appropriate subscription management software, which is easier to use and can provide an all-in-one solution that is cost effective.