Your 2021 Go-to Guide to Choosing a Subscription Billing Platform
Businesses selling recurring contracts rely heavily on the subscription billing platforms used as the capabilities received from these providers can make the difference between a successful company and one that struggles. Any subscription platform worth employing by your business must have, at minimum, a core feature set, including effective subscription tracking, automatic invoicing, simple refund capabilities, and the option to serve customers globally.
A good subscription service platform will even support you with end-to-end retention processes or capabilities to fight churn. This will make the difference between a 5% or 15% renewal rate, or between 10% and 25% churn rate, separating profitable companies from inefficient ones. In this guide, we’ll go through several steps to help you navigate among subscription platforms, giving you a primer on how to choose the one that suits your needs.
When choosing a recurring billing platform, you must consider several aspects related to your business and your market approach. After all, there are dozens of options available, but your choice should be grounded in what is needed for your company.
Refer to the following list as guidance in this decision.
Check Your Business Size
As you might expect, the best eCommerce platform available for subscriptions will depend on your business size and needs. Whether you serve dozens or thousands of customers, you should be able to find a recurring billing platform for you. Depending on where your company is in its maturity process, choice for a subscription service platform is driven first and foremost by your company’s stage:
- Stage 1 — small businesses. Companies who are just starting off primarily need support for acquisitions, as they are now in the process of attracting the first critical pool of subscribers.
- Stage 2 — medium-sized businesses. Once they reach this size, companies start focusing more on retention. They are looking to maintain or develop their relationship with acquired customers and they need help from a subscription platform to keep users engaged.
- Stage 3 — large companies. With growth, businesses reach the expansion stage where their main needs from a recurring billing platform are to support their entrance into new markets, to reach new demographics or to automate internal processes.
Being in one stage or another does not mean companies do not focus on previous priorities, it just shows that their strategical focus is either on acquisition, retention or expansion, and this will impact the type of solution needed.
Therefore, consider your company’s size first. Based on your business size and needs, you’ll be able to assess what you need to look for in your subscription provider.
Consider Your Business Model
A recurring billing platform needs to be flexible. You can either select a subscription platform that specializes in your specific business model, or you can go with one that offers support for a wider variety of models.
Consider the key capability areas that tie in with your product when choosing a subscription management tool:
- Product catalog needs. The more complex your plan configurations and the more versatile your pricing configurations across currencies, the higher the odds that you’ll need a powerful subscription billing platform.
- Rating engine needs. Consider all the overhead that’s being generated if you use multiple billing models and pricing plans, and how easy or hard it is for you right now to manage upgrades, downgrades, or other plan changes. If these aspects are hard right now, your rating engine might be undersized for your needs.
- Pricing plan needs. Just about any recurring billing supplier out there can help with regular subscriptions. If your pricing, however, has multiple levels of complexity (usage-billing, regional pricing, one-time charges, etc.), only top-of-the-line subscription platform providers will provide the flexibility needed.
- Order management. Consider the complexity of your order management and what type of reporting you’ll need. Most recurring billing platforms will effortlessly let you offer free trials. If you’re selling in bundles, though, and even more so if you need custom reporting, opt for one of the established subscription platforms on the market.
- Billing models. Last but not least, it’s worth checking if the supplier you’re considering can help you bill customers at any frequency your business needs, and if they offer pre- and post-paid billing as well.
Master the Three R’s
Refunds, renewals, and retries are all important parts of a digital subscription platform. It must be very simple for you to refund customers who decide to cancel, but even easier for customers to renew with ease (or even automatically). In fact, you’ll find that a professional subscription eCommerce platform has a whole array of marketing tools at your disposal when it comes to renewals. With these options, you can set auto-renewal campaigns for your clients directly from your dashboard, inviting — and even incentivizing! — users to turn on auto-renewal for their recurring contract.
Speaking of renewals, you should also be able to set reminder campaigns about upcoming payments directly from your recurring billing platform, so be sure to ask about this option as well.
A subscription payment platform must also include intelligent retry logic in case payment methods fail due to common soft reasons, such as card expiration or insufficient funds. A surprising 20% of failed transactions from soft declines can be recovered via retry logic — think of all the money you could be leaving on the table, and ask potential suppliers about their revenue recovery tools.
Ensure Great Support
No matter how good your subscription commerce platform is, you’ll surely still need to ask for help at some point — and so will your customers. Given that, you’ll want to ensure that your monthly subscription platform makes it easy to get super-fast support when you need it most, and also offers a simple way for your customers to submit billing questions.
When it comes to offering your subscribers support, you’ll find they require just the right mix of self-service and assisted. Some will want to have their inquiries addressed via phone or email, while others will prefer to look for the information themselves. It’s critical to ensure that your subscription management provider will support you with all these touchpoints.
Understand Your Usage and Metrics
The best subscription platforms supply detailed information about usage. Understanding how often and for what reasons your customers are using your products will enable you to get even more out of your recurring payment platform, and let you explore ways to expand customer usage through smart marketing.
It’s therefore worth finding out what types of usage and subscription analytics a potential provider can offer. You’ll need access to data about renewals and expirations, as well as trends and renewal forecasts, with capabilities to perform cohort analysis and estimate MRR for the months ahead.
When you have the best eCommerce subscription platform you can get, you’ll be able to make better business decisions based on the data they provide. The right provider will help you understand your customer’s value at a glance, regardless of whether you’re selling B2C, B2B, or both.
Ensure a Payment Gateway Is Included
While it might not be as fun as coming up with creative subscription product pairings and descriptions, having a reliable payment gateway for recurring billing is incredibly important to any subscription business.
You’ll want to make sure a payment gateway is part of your recurring billing platform, and even the best platforms for subscription websites won’t necessarily include one.
Find the Best of the Best
There are many review sites out there collecting and rating the best subscription platforms. Consequently, you may find the best subscription website platform for you by looking at reviews from other businesses. Check out authentic user reviews of the top-rated platforms to see what users liked and didn’t like, and how this might relate to your own experience. Look especially for reviews from users like you, operating similar types or sizes of business.
Ultimately, the best recurring payment platform is the one that works for you and your business. Test subscription platforms with a free trial and see first-hand the features that can help your business grow.