Subscription billing models (sometimes called recurring billing) are the cornerstone of any software as a service (SaaS) revenue stream, yet few companies are getting the most out of their subscription program. If you’re looking to glean all of the benefits that SaaS offers businesses—seamless administration, cross-compatibility, universal accessibility—then you definitely want to incorporate recurring revenue and subscription options to your billing model.
As a SaaS business, you can create a steady, predictable revenue stream every month by implementing subscription billing. Membership fees and monthly subscriptions are the ideal way to give clients what they need at a smaller rate by spreading out monthly payments and charging smaller fees per billing period.
Many software services companies charge large up-front fees, which are an increasingly unpopular option and can turn some businesses away. The market for SaaS companies is much larger as the solution is economically savvier.
Ramping Up Your Revenue
Even though Amazon is not in the software industry, they are a great example of subscription management. Amazon has a recurring billing stream, but you might not know it because their program goes under the name, “Subscribe and Save.” Customers subscribe by the millions to Amazon’s program, consequently, enabling more predictable income streams.
The takeaway from Amazon’s success is that subscription programs can be tailored to nearly any product or service, but your business must always be providing value. The client needs to have a consistent, high-quality experience every time they use your product or service so they continue their subscription.
Keep Subscriptions Simple
Since clients usually prefer prepaid recurring billing over budget-weakening, lump-sum payments, you should focus on streamlining the number of options you give your customers. The more simple the program is, the easier it is to digest as a consumer.
Keep things simple, yet offer two to four prepaid recurring billing plans so you don’t overwhelm your audience. From a customer’s perspective, the price of the product and the benefits that it offers are the two most important aspects of the subscription. Get that balance right and you’ve just created trust with customers and enhanced your conversions.
Customers ultimately want to feel like they can conveniently get what they want without too much fuss. Accordingly, you might want to offer free trials to help customers get acquainted with your services.
Balance Risk, Trust, and Fairness
It is good practice to give customers the benefit of the doubt by not requiring credit card details during the free-trial period. This creates much more trust between you and your clients and is less inherently risky from the customer’s perspective should they decide that your service isn’t the right fit.
Fairness also means making sure that it’s crystal-clear to clients that they’re enrolled in the subscription and having defined internal billing processes. It is recommended that your business uses a subscription billing management solution—like 360 Subscription Billing, a Built for NetSuite Native SuiteApp—to automate subscription billing and payments. Part of being fair, eliminating risk, and improving trust is to have a well-managed billing process. One of the benefits of 360 Subscription Billing for NetSuite users is that it’s an on-platform solution so it perfectly syncs with your NetSuite account and the accounting team doesn’t have to learn a new system.
Lastly, listening to customers and revamping your services accordingly is a great way to keep your subscription program robust for years to come. Amazon’s CEO, Jeff Bezos, put it best by saying, “What we need to do is always lean into the future.”
Build a custom demo of 360 Subscription Billing
to see how it can help streamline your recurring billing processes.