Why are your customers taking a hike?
In recent years we have seen a massive move forward in terms of digital transformation. For many customers in both the B2C and B2B space this has led to higher levels of digital interaction. For example, customers can access apps, social media, commerce sites or portals that help them to get things done with the company they are dealing with. How can this help stop your customers taking a hike?
Your world is about delivering a recurring offer for the long term, ensuring your customers stay in love with your offering.
Connecting your subscription model to your customers’ needs
It does not matter if you are a B2B or B2C subscription business, or if you sell software, products, or services. Your world is about delivering a recurring offer for the long term, ensuring your customer loves your offering. Let’s get down to the details.
Managing your subscription master data
Being able to define your subscription offering into clear and understandable master data is crucial. As a subscription provider you must be able to define the following data elements:
#1 — Definition of a subscription product
To define a product means to set up a clear identification of the subscription product. It requires a name, description, variants, and a definition of how the subscription is consumed or bundled.
#2 — Clear pricing model reflecting the value of the subscription product
Customers need to understand your subscription pricing and what they are going to get. Being transparent is key. Customers must be able to calculate and understand pricing on their own, unless your model is more intricate. Build models, like gold, silver and bronze plans with attached pricing and entitlements. Allow customers to choose. When your sales team offers a price, or when customers review pricing online, simplicity is key.
#3 — Terms and conditions for the subscription product
Subscription is about defining what the customer is going to get, often called entitlements, and when they can consume these entitlements. Definition of terms and conditions is important. Can customers who have bought a yearly subscription cancel mid-way? What if they upgrade to a new plan or offering, what happens to the payment and changes to the subscription model?
All possible real-life situations should be captured as terms and conditions, and made clear during the buying process.
#4 — Financial and compliance aspects
Once the aspects above are all defined, the financial ramifications and compliance aspects must be assessed. Can we deal with the right financial postings? Are we compliant with, for example, IFRS 15 or ASC 606? Once subscriptions are rolling, financial postings, VAT or Sales Tax and other aspects, like revenue recognition, must be defined and automated.
#5 — Operational and supply terms and conditions
Lastly, once finance and sales are set, we need to deliver our performance obligations. This operations aspect is critical for the customer experience. Your ability as a subscription provider to slam dunk services delivery, ship your product or supply licences must connect to the customer experience at the moment of buying. Failure to do so leads to an increase in churn and a decrease in customer satisfaction.
