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SaaS businesses often overlook subscription management, and yet this is where the secret to sustainable growth lies. Much more than just tracking your customers useage – , subscription management is all about maintaining relationships, growing revenue, and ensuring long-term success.
Effective subscription management directly impacts your bottom line. Studies show that businesses leveraging upsells and cross-sells can generate up to 30% of their overall revenue.
Ignoring this vital aspect means leaving money on the table.
There are many reasons that make it difficult to manage customer subscriptions, such as:
We’ll discuss how subscription management tools can help you and the best subscription management tools available specifically for SaaS requirements..
The best subscription management tools provide a streamlined way to manage customer revenue. Here’s how:
A team member needs to do repetitive tasks if you choose to manually focus on recurring billing and invoicing. It’s inefficient to manage subscriptions this way, and it takes both time and valuable resources.
A subscription management tool automates the whole recurring billing process. As you use automation and remove human intervention from the process, you can simplify invoice generation and delivery.
Since the average renewal rate for monthly subscriptions is 64%, revenue leakage is a real concern. Some of the possible reasons for churn include:
A subscription management tool can handle payment processing and reduce the churn that occurs as a result of failed payments. The system provides you with all the important customer data and insights into ARR, TCV, and other key metrics with a centralized dashboard.
A subscription management tool helps you cater to the diverse needs of your customers as it offers various subscription plans and pricing options. Customers can choose a plan that best fits them. It provides them with a sense of control and trust in your business.
Your subscription management tool must include key features that will help you manage customer plans, revenue, and enhance the customer experience. These include:
You need a solution to manage customized billing, automated renewals, and the complexities of free trials and discounts. You need your team to move away from manual invoicing and chasing payments. They must focus on growing the business while the tool handles payments and deals with the complexities of modern pricing models and strategies.
A unified platform that integrates with your CPQ (Configure, Price, Quote) and CRM systems creates a streamlined sales and customer management process. You can generate accurate quotes, track deals, and automate subscription provisioning to accelerate the sales cycle. Your team gets access to up-to-date information as you get the ability to sync customer data between your subscription tool and CRM. It helps them provide personalized service and identify upsell or cross-sell opportunities.
If your product offers usage-based pricing or tiered plans, then usage tracking and billing is essential. This feature helps you monitor customer usage in real time and accurately calculate charges based on their consumption. With accurate information, the system automatically generates invoices based on their actual usage.
This feature provides fair and transparent billing while you get insights into customer behavior and usage patterns. You can use the data to refine your pricing strategies and product offerings.
Key metrics like MRR, customer turnover rate, customer lifetime value, and others give you the ability to make choices based on data. This means you need the best subscription management tools to offer access to crucial data that will help you spot patterns and keep an eye on your growth.
Some subscription management tools adopt a revenue percentage fee based on your Annual Recurring Revenue (ARR), while others charge solely based on the number of user seats. It's essential to be aware that revenue percentage-based fees can become increasingly expensive as your business grows and your ARR increases. This model might be suitable for smaller businesses with lower revenue, but as your business scales, the fees can significantly impact your profitability.
Stripe Billing is a developer-friendly platform that simplifies subscription management and helps businesses scale with ease. The platform focuses on flexibility, automation, and global reach. It offers fixed usage-based billing for growing teams that might not be able to afford expensive solutions. However, you may find a fixed pricing structure better once your SaaS company starts generating consistent revenue.
Cacheflow is the best subscription management software that simplifies the complexities of SaaS billing, expansion sales, and renewals. Cacheflow handles the proration calculations, billing updates, and keeps tracking of everything for seamless revenue reporting in your CRM. Your Finance and Customer Success teams can save 100’s of hours per year by automating time-consuming manual tasks, preventing errors, and focusing on the customer relationship instead of contract and billing details.
Zoho subscriptions is a good choice to manage recurring billing and subscriptions for businesses of all sizes. The platform provides a user-friendly interface and essential automation features to easily manage the subscription lifecycle and simplify revenue management.
Recurly is a subscription management platform that helps you easily set up various subscription plans. It provides different customization and testing options to see how different plans perform. The platform also provides important integrations with various payment gateways, CRMs, and accounting software.
Chargebee is a comprehensive subscription management solution that focuses on flexibility and scalability. The tool helps SaaS and eCommerce companies automate every step, from trial to retention.
Subscription management tools are crucial for your SaaS business if you aim to enhance its operations and maximize revenue potential. With the right tool, you can say goodbye to manual billing headaches, missed payments, and revenue leakage.
If you want your renewals on autopilot, billing that never misses, and upsells you can see coming, choose the best SaaS subscription management tool — Cacheflow. Cacheflow’s intuitive subscription management platform helps your team take charge of the entire subscription lifecycle all from one easy-to-use hub. Schedule a demo with Cacheflow and see how we can shave weeks off from the quote-to-close process.
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