The software-as-a-service (SaaS) business model incorporates cloud-based software that is available to several users under pay-per-use or subscription agreement. While, in the subscription business model, the customer pays a recurring payment regularly, such as a monthly charge, in exchange for access to a certain product.
Operations related to issuing credits and refunds and making mid-cycle subscription modifications are referred to as subscription management. Though recurring billing is automated, subscription management requires billing activities that aren’t necessarily foreseen in advance. The subscription business model is being used in a variety of sectors, including utilities and software distribution.
What Is SaaS Subscription Management?
Subscription management software for SaaS can be used to regularly charge consumers a specific amount using a variety of payment methods. It controls the billing cycles and transactions for your subscribers. It allows you to forecast recurring revenue on a monthly or annual basis and to generate constant revenue.
The SaaS subscription management lowers customer churn and recovers fees from payments that are denied. Customer churn is the total number of clients who discontinue doing business with you in a given period.
Key Features of SaaS Subscription Management Software
Some features of the SaaS subscription management program are:
- The ability to subscribe, cancel, stop or change the paying date for a subscription should be simple for your users.
- The software should also offer possibilities for accepting payments on mobile apps and devices.
- It should be able to send automated invoices, receipts and bills according to a predetermined payment schedule.
- It should allow you to design unique workflows for the registration and subscription procedures.
- It should be able to accept payments through a variety of flexible payment methods, such as debit and credit cards, wire transfers, PayPal, Amazon Payments, Stripe and e-checks.
- The software should make your accounting process simpler by enabling you to create, save and execute sales and payment reports.
- It should also offer payment reports with the transaction ID, payment method, status, system notes, allocation and payee information.
- It should allow you to create email templates for welcome and onboarding emails, invoice reminders and emails that are triggered in response to a subscriber’s unique behaviors.
What Are the Benefits of SaaS Subscription Management?
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Enhanced SaaS Onboarding
As SaaS subscriptions rely on recurring monthly billing, it is important to make an impression to retain consumers over the long term. A thorough onboarding process with instructions should be included with the automated SaaS subscription software, which can quickly acquaint your subscribers with the product’s capabilities.
Effective user onboarding provides an excellent user experience and customer satisfaction. It is crucial to convey the value of your product as soon as possible, particularly when providing a free trial.
It is also important for a SaaS subscription management process to ensure a procedure that enables both onboarding and offboarding in an effective and diligent manner.
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Automating the Sales Process
Every customer responds best to individualized communication and genuine problem-solving. Hence it’s unlikely that a sales process will be entirely automated. Nevertheless, you can automate many steps in your sales process. For instance, you can make the process smoother by incorporating some of the following aspects:
- Automated messages or emails immediately after subscribing.
- Notifying clients of declined payments or inaccurate payment details.
- Sending email campaigns regarding offers and various sales milestones.
- Sending receipts and invoices promptly and ensuring they are not caught in spam filters by educating your customers about the steps they can take to prevent this.
Automating some steps in the sales process can give you enough time to focus on steps that require manual intervention, thus, making outstanding products for your consumers.
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Powerful Reporting
Reporting and analytics is an essential part of any subscription management strategy. Access to user data and information is made easier by SaaS subscription management. You should consider metrics like:
- Customer churn rate which tells you how frequently subscribers cancel their subscriptions or choose not to renew.
- Monthly recurring revenue (MRR) which shows the monthly value of new or increased accounts less any value lost from accounts that have been canceled or reduced.
- Customer lifetime value (LTV) is the sum of gross profit made by a customer throughout their dealings with your company.
- Customer acquisition cost (CAC) is the sum of sales and marketing expenses divided by the volume of new customers acquired over a specific period.
You can monitor your revenue, subscription gains or losses and operating expenses using the data your management software collects.
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Increased Customer Satisfaction
Client experience (CX) and client happiness are crucial for growth in the subscription economy. From signup to payments and invoices to regular software use, clients desire a smooth experience with your product. Thus, your company should strive to give clients the most value with the least amount of work.
Using SaaS subscription management software you can provide a greater degree of CX throughout each step of the customer’s journey. The software can automatically email a receipt to the consumer after they subscribe. Thereafter, with each billing cycle, current clients will receive automated invoices and payment notifications.
With frequent notifications, promotions and discounts, the subscription management system will keep customers informed. Automated billing also lessens the chance of human error. SaaS subscription management platform can handle recurring transactions and automatically handle any failed payments or issues.
SaaS Subscription Management Tools
1. Stripe
Stripe billing is one of the most convenient, least expensive and reliable SaaS subscription management tools. There is no recurring fee and the dashboard gives you complete control. It accepts credit and debit cards and other payment methods including Apple Pay and Google Pay.
The advanced security measures of Stripe include encryption, two-factor authentication and fraud detection. Businesses can manage crucial data like attrition rate, revenue and customer demographics using Stripe’s sophisticated analytics and reporting tools.
2. Pabbly
This SaaS subscription management tool has the advantage of being cost-effective for SaaS organizations of all sizes. Automatic email reminders, branded and unlimited invoices for customers, integrated customer portal, recurring and one-time payments and integration with third-party apps are some of the important features of this tool.
3. Chargebee
Chargebee allows you to manage subscriptions, daily billing operations and apply coupons. It has built-in prorated billing which takes care of switched plans and aids subscription firms in streamlining their revenue operations. It also provides an excellent customer experience by automating checkout and subscription management.
4. FastSpring
FastSpring is a user-friendly SaaS subscription management platform that facilitates subscriptions and payments for many digital enterprises around the globe. This subscription management software for SaaS is scalable, transparent, flexible and adaptable. You can manage your subscription from one location with all the features you need.
