Choosing the best subscription billing management software for 2021 & beyond
What is subscription management software?
Subscription management software is a tool used by businesses to facilitate the creation and fulfillment of subscription purchases. It supports businesses with subscription plans, customer retention, and recurring billing, while providing a source of customer, plan usage, and revenue data.
Why use subscription management software?
Successful subscription businesses rely on customer retention as much as they do acquisition. This requires:
- A great product and best in class customer service that attracts new customers and reduces the likelihood of subscribers churning voluntarily
- And subscription management that minimizes the billing errors that lead to involuntary churn.
Subscription management software is designed to help businesses with the processes behind these requirements, enabling them to create and manage flexible subscription experiences for their customers.
Without it, businesses need to build subscription logic in-house to sit on top of a payment gateway. Implementing the level of flexibility required for a subscription model to be successful takes a lot of work from engineering teams. Once up and running, it needs continuous work to maintain and scale processes as you grow - and can ultimately slow down other growth initiatives like new product launches, testing pricing plans, or serving customers in new regions.
Subscription management and subscription billing software are often considered together and a lot of the time are features of the same tool. Subscription billing facilitating recurring payments and subscription management providing the subscription experience.
How you currently manage subscriptions (and other aspects of revenue delivery ), where you operate, and the customers you serve will determine which features of subscription management software will have the most impact on your business.
Here’s some to consider:
- Plan management: The ability to create, manage, and easily modify subscription plans of different lengths, with different price points and payment options, including different feature packages.
- Subscription lifecycle management: The ability to adapt and modify subscriptions across the customer lifecycle. This includes managing changes to customer payment details, upgrades, downgrades, subscription pauses or cancelations, and proration.
- Compliance: Financial compliance, including your responsibility to notify customers of any changes to tax regulations that affect their subscriptions. The level of compliance varies by provider and ranges from integrations with third-party tools to full compliance management and tax liability.
- Customer experience: Functionality for creating a seamless experience that increases brand loyalty and customer retention. This includes allowing customers to control their own subscription plans and payments. A seamless experience will also free your team from plan and billing support queries to focus on value-add and upsell opportunities.
- Reporting and analytics: A reliable source of customer and subscription data that enables businesses to make smarter decisions and optimize processes.
- Integrations: Subscription management is only one aspect of your revenue delivery infrastructure. Unless you use an all-in-one revenue delivery platform like Paddle, you’ll need to integrate your subscription management software with the other tools you use to run your business, including payment gateways, tax compliance and fraud prevention tools, accounting software, and customer support systems.
10 questions to ask subscription management vendors before you buy
Choosing the right software for your business is tough. There’s a lot of competition out there and which one’s right depends on your business, what you need the software to be able to do, and how it will fit into your revenue delivery infrastructure.
To help you navigate your way through the decision-making process, here are ten questions to ask before you buy:
- How does the software manage subscription pauses, cancelations, and refunds? Can customers manage these requests themselves?
- Can I easily manage promotions, discounts, coupons, and trial periods?
- Can I build subscription plans with different billing frequencies and how does the software manage proration?
- What does the customer see when they set up an account or need to renew their subscription? Can these communications be branded?
- How does subscription data sync with my customer support workflows? Does the software provider offer support for customer issues relating to subscriptions?
- What metrics can I track and in what level of detail?
- What support does the software offer regarding sales tax compliance?
- Can I test different subscription plans or pricing against each other?
- What level of protection does the software offer against fraud and chargebacks?
- What third-party integrations are available? How can this software connect to my existing payment and billing workflows?