Definition of subscription management
Subscription management is the system of managing a business’ subscribers, including the preferences of each customer throughout the lifecycle. Effective management entails among many things, managing the customer sign-up process as well as potential renewal opportunities and ensuring a customer is taken care of all the way through to the end of their lifecycle, including managing the cancellation process. A subscription model offers several benefits to a business: it is a great way to build predictable revenue and it can help increase customer retention rates. However, managing a subscription model can have its challenges. It’s often difficult to keep track of the numerous customers, their information, renewal periods, potential upgrades, transaction histories and communications. As a result, businesses interested in managing a subscription model must be willing to invest in the proper tools and software necessary in order to help alleviate the administrative burdens which come along with it.
Challenges of subscription and renewal management
Billing errors, ensuring timeliness of renewals as well as keeping track of potential customer concerns – which could influence renewals – are the most common challenges which arise with subscription and renewal management. Furthermore, there are also challenges associated with keeping track of various interactions customers have during subscription periods as well as the numerous KPIs which should be monitored and the collection process associated with them.
Despite the vigilance of companies, mistakes can often take a long time to even get noticed. In some cases, the business suffers substantial losses with expenditures not only involving identifying and correcting the errors but also rectifying a damaged relationship with the customer.
Hence, the company must pour significant resources and focus into billing and tracking a broad subscription base – an undertaking that requires incredible accuracy and endless follow-ups to make the most of the time and money invested. And technology can be a great enabler in that area.
Leveraging CRM to support subscription and renewal management
Customer relationship management (CRM) and subscription management can quite easily go hand-in-hand. CRM focuses on the interactions between the company and its customers and can assist with the actual management of customers, as well as a multitude of information about them including their subscriptions, preferences and interactions with the business. It can also provide companies with valuable data and insights which can be used in order to influence important strategic business decisions and relationships with customers.
A powerful CRM solution must be able to automate the majority of the subscription and renewal management process as well as deliver all the pertinent data necessary for a straightforward process. For instance, some organizations automatically send out renewal notifications to consumers with expiring contracts. Meanwhile, others send these reminders to their Account Managers instead in an effort to trigger actions that will help them reach out to their customers about the renewals in a timely manner.
Aside from managing subscriptions and renewals, a CRM platform can also be used to alert business owners on fundamental milestones throughout the lifecycle of a subscription. This allows a member of the team to check in on a customer every quarter or even monthly to establish that both are still on the same page and that the customer is receiving value from the subscription. The obvious advantage of this is the avoidance of any surprise when renewal time comes.
Here are other benefits of implementing a CRM software to manage a business’ subscriptions and renewals.
The need to contact a vast number of clients to ensure recurring payments can be a headache—the type that can result in loss of valuable time, particularly for finance teams. With a CRM solution, businesses can implement an automation process that will automatically draft and send invoices on designated dates. This is crucial in ensuring that clients remain on board.
Automation also eliminates the necessity to personally reach out to every customer every time their renewal period comes up. Customers should also appreciate this offered convenience—they’ll likely find it preferable if a business can provide the products or services that they intend to regularly purchase without the need to re-enter or go through the lengthy and sometimes tedious sales process over and over.
More and more customers demand personalization from the companies that they do business with. This means flexible terms and plans to accommodate the varying requirements of every paying client. With data gathered from a reliable CRM platform, it’s easy to set personalized billing terms for each customer.
Analytics from the behavior of individual consumers can also be useful in establishing a workable and agreeable billing frequency for all parties. For instance, the sales team can conveniently track any “at-risk” clients and take remedial action before things escalate. The business can analyze client data to gain a more defined idea of who their customers are and what they truly want or expect.
Companies can also forge better relationships with their customers and gain access to a demographic that has already expressed interest and commitment to the products and services they offer. A business can eventually tap into this population for reliable feedback and even new offers.
Customers who sign up for subscriptions are some of the most important clients in every business. Unfortunately, a single mistake with regards to billing, renewals, upgrades or accurately tracking and collecting valuable customer feedback or KPIs could undo months or even years of a good relationship with a customer and lead to losing them. With CRM software in place, information used for subscriptions and renewals is stored against each customer. This ensures that succeeding transactions have no errors as tools like auto-populating fields can guarantee an error-free and straight forward process.
Convincing customers to sign up for regular subscriptions is a great way for a business to create a stable and predictable revenue stream and drive strong customer lifetime value. However, subscriptions and renewals can be a challenge to manage, track and maintain. As a result, it’s essential for companies to establish an underlying infrastructure and leverage CRM in order to support subscription management so that it can be used in the most effective and efficient manner.