10 Essential Considerations for Successful Subscription Businesses

The success of subscription-based business models has led many to consider whether they should implement it for their own businesses. If this is you, be sure to get advice from an eCommerce agency and read on for essential points to consider.

1. Deciding on your go-to-market pricing.

At first, you may price your subscription packages based on an educated guess. It’s also common to offer free trials of subscription packages, which boosts customer acquisition but can quickly cause serious issues due to lack of corresponding revenue.
In order to tackle this, it’s essential that you adopt a software solution like Zuora, which offers a degree of flexibility with pricing – allowing you to adjust as you grow. Over time, you’ll obtain valuable data to inform your pricing model but first, you’ve got to get started.

2. No customer-facing pricing/sign up.

This is an oversight of many B2B businesses, as they trade easy customer sign up for lead generation and sales funnels. In most instances, this works, but you could be missing out on customers seeking the no-nonsense, self-service account that they’re used to as a regular consumer.
Creating customer-facing pricing and sign up needn’t be a chore; Cerillion Skyline can be used to easily implement this.

3. Keeping up with customer service.

As your business grows, it can put a strain on internal resources if you’re unable to scale properly. For this reason, it’s often more cost-effective to outsource your customer service to a dedicated provider such as Zendesk.

4. Tracking finances/business health.

The ever-changing landscape of the digital economy and the rise of subscription business models can no longer be measured effectively with traditional GAAP (Generally Accepted Accounting Principles).
Revenue recognition software is an invaluable investment in this case, with companies like MPP Global offering advanced analytics and reporting capabilities.

5. Credit card/billing info expiration.

Known as ‘dunning’ or ‘involuntary churn’, this is a common and persistent problem for any subscription-based business. This is where churn management and dunning strategies can be used to communicate with at-risk customers prior to failed payments.
To ensure customers receive an uninterrupted service, consider implementing software which works to lower your churn rates, like Chargify.

6. Customer retention vs. acquisition.

Customers can churn involuntarily but some make a conscious choice to terminate. However, a percentage of these customers can be persuaded to continue with their subscription through incentives and rewards.
It costs more to acquire new customers than it does to retain existing ones. As such, employing software which can easily integrate offers, discount rules and rewards – such as FastSpring – is essential.

7. Security and data protection.

In the wake of the Cambridge Analytica scandal and fresh concern over how customers’ private data is obtained, used and stored; it’s of paramount importance that your software complies with current security standards.
Braintree, an offshoot of PayPal, is a good option for any business as support is offered to ensure that your website, integration and payment flow is completely secure.

8. Fulfillment integration.

If you sell physical products via subscription, you have the added issue of ensuring that shipments are delivered as scheduled and in good condition. You may also lack the facilities to pick, pack and store your products.
In this case, partnering with a company like Fulfilment Crowd, who offer order fulfillment services and associated software, is an excellent option.

9. Multi-language and multi-currency support.

Businesses which offer their products or services in multiple locations and/or languages need to ensure that this is taken into account at billing level, as customers are much more comfortable dealing with billing in their own language and currency.
Luckily, software providers like Chargebee include this functionality, easing any customer anxiety.

10. Integration with payment gateways/shopping carts.

Lastly, it’s essential that any eCommerce software that you adopt can correctly integrate with your payment gateway and shopping cart.
If you’re unsure which will work best with your current platform – be it Magento, Shopify, WordPress, etc. – you should consult an eCommerce agency and/or a software development agency before implementing any changes.
Source list:

https://stopad.io/blog/subscription-revenue-model-challenges

https://www.scalefast.com/the-challenges-of-operating-ecommerce-subscription-businesses/

https://www.subbly.co/blog/common-challenges-subscription-business/

https://www.chargebee.com/blog/10-common-recurring-billing-challenges-learn-how-to-overcome-them/

https://info.fastspring.com/blog/how-to-solve-the-biggest-problems-with-subscription-billing

https://www.zuora.com/guides/7-subscription-billing-mistakes-avoid/

https://mindtouch.com/resources/trends-demanding-customer-self-service