Product Managers who work in a business with a subscription model need as much time and space as possible to innovate and create the best product offering. Surprisingly, the key to this opportunity lies in subscription management best practices. This article talks through 10 of the most effective tips there are.
In this article:
- Automate Billing Processes
- Implement Tiered Pricing Models
- Optimize Onboarding Experiences
- Leverage Data Analytics
- Enhance Customer Communication
- Focus on Customer Retention
- Use Feedback to Drive Product Improvements
- Regularly Review and Update Subscription Plans
- Ensure Compliance with Regulations
- Invest in Reliable Subscription Management Software
A Product Manager’s job isn’t easy. You juggle process paralysis. Stakeholders that don’t understand how much investment needs to go into product development. The stress of deadlines and launches. And siloed decision-making, just for a start.
So when you see an article about tips for subscription management, it might seem confusing.
But if a subscription-based business wants to be successful, it needs effective recurring revenue management.
It increases customer retention, builds the customer base, cuts operations costs, and serves as the stabilizing factor in the relationships between customers and the products you work so hard to innovate.
If your company’s subscription management could use some improvement, here are 10 tips for how to achieve a subscription management process that is seamless and makes your job a lot easier.
Tip 1: Automate Billing Processes
The billing process in businesses with recurring revenue can be a significant challenge. Silos between sales, revenue, customer service, and product servicing (when applicable) can make invoicing and payments collection take weeks or even months.
They can also be incorrect, which creates a new set of problems from disputes with customers to revenue leakage. But automating the billing process from invoicing to payment collection can save time, cut expensive human errors, and make customers a lot happier.
What you get with automation:
- Accuracy: Automated systems take contract terms regarding your products and translate them into correct bills you cancel confident about. That cuts the expense of re-issuing invoices, and cuts churn.
- Efficiency: Automation enables the free-flow of information between your teams, and takes into account add-ons, upgrades, cross-selling and any other changes in subscriptions and feeds them directly into the process. There aren’t any delays. And the teams involved have a lot more time to focus on strategic tasks.
- Customer Satisfaction: When customers get correct bills on time, they trust your brand more. That means they’re more likely to buy more of your products.
How to get automation:
- Choose the Right Tools: There are a lot of options out there, but a solution that covers your end-to-end is going to save a lot more time and money as time goes on.
- Create Automated Workflows: Depending on the nature of your products and subscriptions, define your workflows for the payment process, including what to do with late and defaulted payments.
- Monitor: When you regularly review your processes, you’ll be able to spot any areas for improvement. And when things are ticking over nicely, you’ll be able to concentrate on developing the best new products.
Tip 2: Implement Tiered Pricing Models
Choosing pricing models can be a high-pressure situation. No one wants to get it wrong- it’s too easy to lose customers to another brand that offers better terms, a clearer subscription, or cheaper prices.
As the Product Manager, the last thing you want is for customers to either be so confused, locked into terms they don’t like, or priced out of experiencing your products. And you don’t want them to be undercharged either.
Your products have value, so the pricing models should reflect that. With tiered pricing models, customers will get the flexibility that suits their unique circumstances.
- Attract Multiple Segments: Though it’s great to be rock-solid with a particular segment, growth comes from attracting as many segments as possible to your products. Multiple pricing tiers give them options that meet their needs and budgets.
- Upsell Opportunities: Customers that you already have are far more likely to buy off you than brand-new customers. Lower tiers encourage them to upgrade as their needs grow.
- More Revenue: When there are multiple pricing options, no one is priced out, forced to go to your competition. That means more inbound revenue.
How to get tiered pricing to work for you:
- Understand Your Customers: Knowing your customers, their behaviours and their needs will always pay in dividends. Whether that’s market research, or crunching data that segments and suggests appropriate tiers, you’re far more likely to package your products in a way that they will want.
- Make Clear Value Propositions: Your products are amazing. You spend a lot of time developing and launching them. But customers need to see their value. Tiered pricing creates multiple value propositions that can justify the price differences.
- Test and Adjust: Testing systems, such as the classic A/B will help you evaluate which pricing tiers work best for the customer base. That way when adjustments are needed, you know where and why.
Tip 3: Optimize Onboarding Experiences
Often onboarding is the first experience a customer has with a brand or a specific product. That’s why the onboarding process should be as smooth as possible.
You want your customers to be able to focus on how great your products are, not when onboarding is going to happen, why it’s so difficult or confusing, or what’s the point in the product in the first place.
- Personalization: The process should be shaped to meet each customer’s needs, goals, and schedule.
- Clarity: It should be as easy as possible. Step-by-step instructions, online tutorials, 1-on-1 support, demonstration videos, and other resources can help guide them through the process.
- Support: The most impactful customer service doesn’t wait until there’s a problem. The proactive approach (including live chat, check-ins and even chatbots) keep things ticking along.
How to create a good onboarding process:
- Segmentation: Different customers have differing needs. So onboarding paths can be based on customer-segmented behavior and needs, as well as usage.
- Interactive Content: Interactive content like quizzes, tutorials and even apps boosts retention, engagement and emotional investment in the product.
- Get Feedback: Customers will tell you what’s working for them and what isn’t. Feedback is essential to improve the experience.
Tip 4: Leverage Data Analytics
Data analytics is a powerful tool for optimizing subscription management. The surprising thing is that many companies leave data to the side. It stays an untapped resource, instead of the pure gold it can be.
Analyzing customer data can inform everything from product development to targeting marketing, and a personalized CX that boosts CLV and cuts churn.
- Customer Insight: You can get deep insight into the behavior, preferences, patterns, and needs of both your current customer base and potential new customers.
- Predictions: Predictive analytics can automatically provide forecasted trends, warn you of what’s risking churn, and help you take proactive measures before the problem is a real problem.
- KPIs: Data helps you track key performance metrics that are essential to your company’s health. These include MRR (Monthly Recurring Revenue), CAC (Customer Acquisition Cost), and LTV (Lifetime Value).
How to get value from data analytics:
- Bring in Comprehensive Analytics Tools: There are many types of analytic tools out there, so ensure your tools are robust enough to cover everything from customer segmentation to financial data, to monitoring the current market and even what your competitors are doing.
- Monitor and Interpret KPIs: Analytics will keep their eye on the metrics that are most important, and translate that into dashboards that are easy for you and your stakeholders to understand.
- Actionable Insights: The best analytics tools will create insights and reports for you to strategize on a number of issues including pricing optimization, boosting retention, and creating the best unique customer experience.
Tip 5: Enhance Customer Communication
The better the communication with customers, the better the result. Customers appreciate that a business is there for them after the sale. This is especially true with subscription customers, where the necessity of long-term communication is built into the model.
Communication enables stronger customer relationships, which translates into better satisfaction.
- Multi-Channel Approach: There are a variety of channels waiting to be enhanced. And that’s a good thing! Everything from social media, SMS, email, and in-app messaging provide opportunities for you to build engagement and trust where each customer is most active.
- Personalization: With communication, definitely does not fit all. Customers value the personal touch, whether that’s simply using their need or tailoring your communication to their behavior, needs, and preferences.
- Updates: When you send regular updates, customers stay informed what you work so hard on: new products, features, and subscription packages.
What you can use for communication:
- CRM Systems: Customer Relationship Management is a godsend for busy companies. They manage and personalize communications for your company, saving a lot of time, effort, and resources.
- Automation: You can set up automated messaging (that can be personalized!) for everything from emails, personalized offers, renewal reminders, and loyalty schemes.
- Feedback: Mechanisms that make feedback effortless for customers will vastly improve your feedback rate. Surveys, pop-ups, and scoring can gather opinions on whatever you want, including suggestions for future products.
Tip 6: Focus on Customer Retention
Existing customers are far more likely to buy more of the products you develop, and spend more money versus brand new potential customers. That’s why keeping your existing customers is far more cost-effective than acquiring new ones.
The stronger your customer retention strategy and investment, the better the potential for growth and stability.
- Regular Engagement: Things like product updates, newsletters, and personalized content will keep customers interested in what you have to offer.
- Loyalty: Customers love loyalty programs, so reward long-term customers with exclusive access and products, referral bonuses, and special offers.
- The Proactive Approach: When support is proactive, it drastically cuts the possibility that you’ll have to go into damage control with a customer. Find potential issues early before they escalate, so they can be solved before they’re an expensive problem.
How to measure your retention success:
- Churn Rate: When customers leave, you know something’s not right, and things have to change.
- Customer Satisfaction: Feedback will not only let you know how happy your customers are, but why they’re happy.
- Renewal: You can track the renewal rates to gauge customer loyalty.
Tip 7: Use Feedback to Drive Product Improvements
Though feedback is always important for the health of a company, product development needs customer feedback for direction.
Some Product Managers don’t get the investment they need into customer feedback to drive the best types of product innovation. But you need that – otherwise how do you know what your customers want and need?
- Surveys: Surveys can give the anonymity necessary to get truthful feedback. Sometimes identifiable customers don’t want to admit things about their needs and vulnerabilities, so this solves that problem.
- Focus Groups: Focus groups can offer in-depth conversations about what customers think about your products and their uses. Focus groups can be segmented as well, giving insights into the segments you have and the ones you want to attract with your new products.
- User Interviews: 1-on-1 interviews can also give deep insights into customer needs because your side can adjust questions depending on the information they’re getting.
What to do with the feedback:
- Analyze It: Different teams will analyze and interpret feedback in different ways, so the more the feedback is read and discussed the more comprehensive the meaning of the feedback.
- Improve: Product Managers need the space to prioritize changes in products and development based on the feedback. That’s how to meet customer needs and solve their problems.
- Broadcast the Changes: When you alter your product offering based on your customer feedback, let them know! Customers want to see the value of your products, and they love to feel valued by you.
Tip 8: Regularly Review and Update Subscription Plans
Like products, subscription plans should change to meet both the market and customer needs. Very few people’s circumstances remain unchanged, so it helps to meet them where they are.
This involves regularly checking over and updating the subscription terms, offerings, product combinations, add-ons, cross-selling, and upgrades.
- Analysis of Competition: There’s a lot of competition in subscriptions. Competitors constantly innovate their products and pricing. And their advantages can help poach your customers away. That’s why it’s essential to be on top of your competitors’ offerings, and exploit gaps and chances for differentiation.
- Customer Feedback: Customers will tell you what they’re hoping for, and what changes they would like to see. It’s the way you’ll understand their needs and preferences at any given time.
- Usage: Usage data gives a clear picture how how your products are used, which are most popular, and whether there are trends that can inform your plants and strategies
What’s needed in the update:
- Introductions to the New Features: When you add new features and benefits (which comes to you naturally), your subscription will increase in value. So can your price.
- Adjusted Prices: Pricing relies on more than just the objective value of your products. Things like market conditions, your CLV and CAC, etc. can all influence it.
- Simplicity: No matter what changes in the offering or plan, everything needs to remain as simple as possible, so customers know exactly what they’re choosing and getting.
Tip 9: Ensure Compliance with Regulations
Compliance with regulations is critical for a variety of reasons. When you are non-compliant, you’re vulnerable to legal issues, fines, lawsuits, and destruction of customer trust and your reputation, no matter how excellent your products.
That’s extremely hard or even impossible to overcome. The stakes are that high. That’s why your company must keep up with any relevant regulations across your company and customer locations.
- CCPA: Because consumer data protection in the USA varies by state, it’s important to keep abreast of all the states. for example, the California Consumer Privacy Act (CCPA) protects consumer privacy rights in California.
- GDPR: The General Data Protection Regulation (GDPR) regulates data protection and privacy throughout the European Union.
- PCI DSS: Payment regulations like the Payment Card Industry Data Security Standard.
Strategies for regulatory compliance
- Audits: Make sure to conduct regular audits (internal and 3rd party) to ensure compliance with all relevant regulations.
- Training: Give employees the training they need about regulatory requirements, best practices, and an understanding of the consequences of falling out of compliance.
- Data Protection and Trackers: Ensure your own systems are secure, and that you constantly track the regulatory landscape so that changes aren’t missed.
Tip 10: Invest in Reliable Subscription Management Software
We understand that all these tips appear to require a huge investment of time and resources. But with the right subscription management solution, it doesn’t have to be that way.
In fact, you can action ALL of the above tips and still end up with more time, revenue, and growth because the best solutions can streamline all these processes for you, while boosting efficiency, and improving and personalizing the customer experience.
All with one platform.
- AI-powered Automation: The end-to-end subscription management solution will harness AI-driven power to automate billing, invoicing, and payment processes to cut manual errors. It can create offerings and pricing models and spot sales opportunities. It also monitors your KPIs and creates reports of all kinds, with numbers you can rely on.
- Integration: The best solutions can integrate with systems that you already have, and migrate legacy data for you so it isn’t lost.
- Scalability: It allows you to scale with total ease.
How to choose the right software:
- Features: Find out whether the software meets all of your needs- through research, discovery calls, etc.
- User Experience: How accessible is the software? Does it feel unique to your business? Is the experience enjoyable? Demonstrations can help you see how it would work for you.
- Support and Training: Ensure that the software developer has ample support and training, along with continual check-ins to see how it’s going.
Conclusion
When your company’s subscription management runs well, your customers will be happy. That means that your products have a much higher chance of success.
Implementing these tips will not only streamline the entire end-to-end subscription process, but boost customer satisfaction, cut churn, and pull in far more revenue.
On top of that, it optimizes operations for cost and time savings so that you have the time and energy to continue to drive your company forward with innovative products that set you apart from your competitors.
If this sounds like an ideal situation, why not book a free, no-obligation discovery call? We’d love to hear about your unique challenges and circumstances.
Let’s work together to create an environment where your products take center stage.
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