Why Your Business Needs a Subscription Management Software

Posted 3 years ago by Max Komonov

Imagine you have an online subscription business — where people have to register to buy a product or service — and you deal with just a handful of customers. You probably might not see the need for a subscription management system. If, on the other hand, you run a business that serves a lot of customers daily, it’s most likely you already have a subscription-based business model in place, or are planning to do so as your business scales in growth.

In the first scenario, it’s easy to manually coordinate and manage your customers’ orders and subscriptions, but if the second example describes your situation, managing the subscription plans of every single subscriber manually can be quite a nightmare. At this point your business needs an efficient subscription management system.

What you need to succeed here is subscription management software. This is how businesses that run a subscription-based business model record higher customer retention, rake in more revenues, and completely automate the process of managing customers’ subscriptions. This article is dedicated to helping you understand what a subscription management software is, and how it can positively impact how you do business to improve your results in retention and organization. But before we dive in, let’s take some time to understand what subscription management is.

What is a Subscription Management System?

In simple terms, a subscription management system is what helps you collect customer’s data, safely store subscribers’ information, and manage a diverse number of different subscription plans. With a subscription manager in place, it becomes so much easier to manage the accounts of all subscribers registered with your business.

It’s like having to pick out a needle from a haystack without needing to rummage through the entire hay pile at all — all you need to do is just take it out, and that’s because you know exactly where it is. Blissful, right? But that’s just the tip of the iceberg when it comes to implementing a fully functional subscription management system for businesses that have hundreds or thousands of subscribers.

For organizations that offer subscription-based services, it would be practically impossible to manage the accounts or needs of all subscribers without a subscription management software or even do business at all.

How Does Subscription Management Software Work?

Depending on the uniqueness of your business, the subscription management software you use might differ from those used by other businesses. These slight differences ensure that the unique features and diverse functionalities that each business needs are available. While all subscription management systems are not the same, some common features that characterize them.

Differentiation of subscription plans: your subscription management software should allow you to create different subscription plans to cater to the needs of the different categories of customers patronizing your business. For instance, depending on a customer’s preference, they can go for the basic, medium, or platinum offer. They should also be able to choose the billing frequency and billing quote (and if possible, get a free trial and cancel whenever they want to).
View subscribers transactions history: an ideal subscription management software allows business owners and administrators to review any particular subscribers lifecycle, plan changes, and current subscription.
Manage subscribers accounts: a typical subscription management software is also designed to help business owners manage their subscribers accounts. This includes prompting them to switch to a more suitable subscription plan, where necessary, keeping them up-to-date on relevant changes, and maybe allowing them to switch to a better or more flexible payment method.
Automated billing: this is one of the main purposes of subscription management software. It offers you an improved or advanced billing system that effectively eliminates the need to collect subscribers’ payments manually. Billing automation is one of the juices of any subscription management system. There might also be a possibility for you to process a refund where applicable. This is why subscription software often features multiple payment gateways such as PayPal, Razorpay, Stripe, and Authorize.net to give customers enough options to pick from.
Generate revenue statistics: besides giving you an overview of all subscribers’ information, software management systems should be able to provide, at a glance, the amount of revenue coming in from the subscribers. And it should also be able to render this information in an easy-to-understand format, perhaps including graphs, pictograms, infographics, etc.

Stages of Subscription Management

Subscription management software typically takes a customer through a subscription lifecycle that touches on the following stages:

Pre-Signup stage: at the point where prospective customers are still browsing through your website, subscription management tools can be used to educate them on what they stand to benefit from, including pricing, payment options, and special offers.
Discount and special offers: sometimes, these can be used to re-market hesitant prospects and spur them on towards starting a subscription.
Upgrade/downgrade Management: subscribers may wish to upgrade or downgrade to a more comfortable plan. Your company’s subscription management software should be able to help customers navigate this stage with very little help.
Cancel/End subscription: A subscription management system ensures a customer’s subscription ends at the specified date and also flexible enough to allow subscribers to cancel when they choose to. However, subscription management tools can be integrated with email marketing and CRM systems to automatically re-market customers, instead of letting them just vanish into thin air.

Understanding the Difference between Subscription Management and Recurring Billing

Subscription-based businesses integrate recurring billing into their subscription management system to ensure a seamless flow, starting from when customers make a subscription to the provision of payment gateways and automated billing for automated collection. Subscription management systems and recurring billing are often used so interchangeably that they almost seem to mean the same thing.

Specifically, subscription management systems manage and oversee the interactions between subscription-based businesses and their customers (subscribers). This typically involves:

Updating customer information
Upgrading and downgrading subscriptions
Reporting revenue generation and subscriber numbers, etc.
Managing subscribers’ preferences.

Recurring billing, on the other hand, focuses on making sure that every stage of the billing process runs automatically without hitches. This includes,

Invoice generation, which also involves handling of proration
Payment tracking, and
Safely storing payment information

More on How Subscription Management Can Help Your Subscription Business

Here are more ways a subscription management software can complement the hard efforts you put into your business.

First and foremost, subscription management software empowers your business with a smart pricing system. As customers are coming on board, there’s a pricing plan that matches the value they’re getting from your business.

Subscription management software makes for easy tracking of changes with customers, thereby giving you actionable insights into how to better manage customers’ subscriptions.

With a subscription management system in place, users can keep track of subscription revenue, changes in subscription trends, number of subscribers, and can view the report in an easy-to-understand exportable form.

Subscription management software helps your business improve its relationship with customers by enhancing communication between users and the business.

They usually have self-service portals that enable subscribers to make changes without having to contact customer support.

Taking Action

Are you looking for the right software management system for your business? If you run a subscription business, there are different subscription management software to help you set up recurring billing and automate the collection process. We are happy to help at Ecwid, so feel free to reach out to us for further assistance or support. As always, we’re here to help!

Do you want to know more about launching a subscription business?

About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.