The subscription e-commerce market is expected to grow to $196.35 billion in 2023. This boom is attracting entrants from all manner of industries.
Following the subscription business model, whether it is subscription software or a curated subscription box, guarantees recurring revenue. You are guaranteed revenue as long as your product and service quality meet customer expectations.
But as you will discover, the nuts and bolts of running a subscription business require a solid infrastructure to ensure successful opera after launching. The business model has many components that must work together smoothly if those recurring payments are to keep rolling in like clockwork.
In short, if your subscription business is to run like a well-oiled machine, you must invest in subscription management software.
In this article, you will learn how to choose that software.
Subscription management software automates the tasks and processes of managing customer subscriptions from when they sign up to when they cancel their subscriptions.
The software handles all aspects of subscription management. It lets you automate and helps you optimise the workflows of a subscription business right through the customer lifecycle, including:
You need robust software that ties together all these processes. Software that automates billing and eliminates errors that frustrate customers and cause them to unsubscribe and failed payments that lead to involuntary churn.
Subscription management software takes care of the whole spectrum of tasks and processes you perform to manage customer subscriptions from sign-up to cancellation.
On the other hand, subscription billing software only takes care of billing, which is just one component of subscription management.
Subscription management software automates and streamlines the whole subscription experience, including billing and recurring payments.
Before settling on a subscription management platform, it is essential to imagine all the tools you need to run a successful subscription business.
Let’s look at what to consider when choosing software for subscription management:
To keep your subscription offerings fresh and to respond to shifting customer preferences and competitive pressures, your subscription billing management software must make it easy to modify existing plan offerings and add new ones.
Another useful functionality is integration with and the ability to sync with your inventory management system automatically. The relationship between your subscription management software and CRM tool must be just as seamless for ease of data sharing.
Subscription e-commerce is desired for its ability to generate recurring revenue, which improves revenue prediction and decision-making.
So, for the best subscription experience, the billing function must be automated. It can’t be manual, as it will quickly overwhelm your staff when your business starts to scale, which increases the risk of billing errors and revenue leakages.
One thing you can be sure of in the subscription business is that there will be competition. Yes, you can find underserved corners of the market. But your success will inevitably invite competition.
If there are already established players, a good product is not enough to pry subscribers away from competitors. Lower introductory prices and discounts can. This is why the subscription management software you choose must provide the flexibility to easily change prices, configure free trials, and have coupon code and gift card functionality.
Great merchant tools that make it easy to modify subscription plans and configure free trials and discounts make it easy to run your business. However, they need to be matched by equally capable shopper tools to deliver an exceptional subscription experience for customers.
Your subscription management platform must have a robust customer portal with tools that make it easy for customers to manage their accounts. These customer-facing features should enable customers to, among other actions:
Customers should be able to accomplish most account management tasks without involving your customer support. Empowering your customers this way greatly improves the subscriber experience.
No matter how good you make all other parts of the subscription experience, if customers can’t easily pay, you have no business. Indeed, one of the factors that hurt e-commerce businesses is the failure to provide customers with enough payment options.
Most customers have payment methods they prefer to use. You should know these. In Kenya, everyone knows that the most popular payment method is the mobile money wallet, M-Pesa.
Still, M-Pesa should not be the only payment method you have on your checkout pages. If their M-Pesa is overdrawn, there should be other payment methods customers can try.
For a great checkout experience, you must provide two or more payment methods. For example, the Intasend payment gateway, on top of which our subscription and automatic billing software is built, offers Visa, Mastercard, and Bitcoin as alternative payment methods to M-Pesa.
Multiple payment options are only one element of a subscriber-friendly checkout process. For the best experience, the checkout process should be fast and involve as few steps as possible.
If customers have to fill out lengthy forms and provide too much personal and unnecessary information, they are more likely to abandon their carts. After all the resources spent on lead generation and nurturing, this represents profound waste.
To prevent checkout abandonment and optimise the sign-up experience, here are other best practices to follow:
Still on the checkout process:
With credit card and mobile wallet fraud a growing challenge in Kenya, people are apprehensive about sharing their payment information online. Your business’ success hinges on your ability to protect their payment information.
It is, therefore, stating the obvious to say you must choose a subscription management platform with robust payment security features. The industry standard for this is PCI-DSS.
Incorporate payment security seals and badges on your website footer and checkout pages to reassure customers that their payment information is safe.
To operate your subscription business without real-time intelligence on current subscribers and sales is akin to flying blind. You rob yourself of an early warning system that alerts you to imminent struggles.
The subscription management software you choose should make it easy to track crucial information and centralise it in easily accessible reports. Such data include:
Subscription billing, where customers pay before receiving the service, product, or access, can trick you into counting chickens that have yet to hatch. It is, thus, critical for decision-making to have the capability to separate earned from deferred revenue.
Deferred revenue is recorded as a liability in your books. Therefore, you must choose a recurring billing software that monitors your revenue and can recognise and provide accurate reports on deferred and earned revenue in real time. This gives you a more accurate picture of your finances and revenue.
Customer payments can fail for various reasons, including some that are out of your control. For example, if a customer’s bank account is overdrawn, charges you make to their card will be declined by their bank.
This leads to revenue leakage, which can lead to involuntary churn. Involuntary churn is when a subscription fails to renew because a payment could not be processed, not because the customer intentionally cancelled.
Manually tracking failed payments takes a lot of work and opens room for billing errors. So, the software you use for subscription management should track payments and have built-in functionality to send automatic notifications after every successful and failed payment.
For failed payments, the notification reminds customers that their subscription has not been renewed because the payment could not be processed.
It can then advise to update payment information if it has changed and suggest alternative payment methods the customer could use. This way, you can recover revenue and save a customer that would otherwise have been lost.
And speaking of failed payments, you will want to choose a subscription billing management software that does not charge for failed payments. Those failed payment charges can add up. And, since you usually can’t do much to prevent them, they are a painful expense to absorb.
After all the effort invested in choosing subscription management software, you don’t want to drop the ball by choosing a payment gateway that does not adequately support your payment processing needs. Not just yours but your customers' needs, too.
A well-chosen payment gateway supports payment methods your customers want to use. Our subscription and automatic billing software is built on a tried and tested payment gateway designed with the needs of Kenyan businesses and consumers in mind.
Our payment and automatic billing tools enable you to run your subscription business efficiently. They help streamline your subscription workflow and make it easy for customers to manage their subscriptions.
Book a demo or learn more about our subscription and automatic billing software here.