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Are you taking local currency and customer requirements into account in your subscriptions?


When you are planning to bring your subscription business to new countries, new rules of play apply. SaaS and XaaS businesses are built for global growth. Companies like Dropbox and Spotify have shown a huge portion of their customers are global. The same counts for Microsoft and other SaaS companies. Going global means onboarding currency risks, dealing with new languages and regulations, and new customer pricing models.


A common recurring theme in the success that these companies have had, has been a thorough practice of Price Localization. Allowing a customer to pay in their native currency, with a preferred mode of payment, is indeed a big deal.

Going international means new rules and regulations to deal with.


Guiding your internal processes and applications to support going global:


#1 — Build a roll out roadmap, do not apply a shotgun approach

Pick one country at a time and ensure that there are common elements from one to the next.. For example, there are stronger commonalities between the UK and Ireland, then the UK and Germany. United Kingdom and then go to Ireland, instead of Germany. Language as well as other elements of business align better between certain countries. Nevertheless, it is key to understand any regulation in each country you do business in. For example in California you are not allowed to automatically renew subscriptions. Take each country or region one step at the time, explore all legal, financial and price culture matters alongside a clear business plan.

#2 — Understanding different price levels in different countries or regions

Significant effort is required to plan and price your subscriptions in a new region or country. Not all countries can afford the same rates and pricing levels. Also, cultural aspects can play into your pricing strategy. Ensure you test and validate your pricing models before assuming a ‘same size fits all’ approach.

#3 — Currency is a headache

With ever changing exchange rates, frustration can occur for you and your customers. Sharp fluctuations can be good for you, but it can raise subscription costs for your customers, in the worst case resulting in churn. For larger B2B customers, who might be spending tens of thousands of dollars a month, this monthly difference can be huge. From their perspective, this creates a budgeting nightmare. If you have ever bought something online from an international company, you will have seen the impact of foreign currency conversion fees.
These exchange rate fees are charged by your bank or payment gateway, and in some cases can be as high as 3%-5%. For large-scale B2B transactions, though, these fees can add up significantly. That Australian customer that is paying you $100K a month? They would be paying as much as $60,000 a year in foreign currency conversion fees, making your subscription offering far less attractive.

#4 — Prepare your back-end financials

Going international means new rules and regulations to deal with and your backend applications and process must align.

Think about items such as:

  • Extending your VAT or Tax declarations
  • Dealing with currency evaluations
  • Setting up new legal entities
  • Deploying new payment gateway and bank accounts
  • Translating financial documents, such as invoices or payment reminders into new languages
  • Adjusting reporting to the new setup, like cash flow per currency

These are just a few critical items, per country or region others will apply. Besides ensuring your team and processes are in place, your business applications must have the functionality to cover requirements such as the ones above.

#5 — Improve your speed-to-bill

One tactic that speeds up cash in is pre-invoicing. Rather than billing on the renewal dates, setup routines to bill 30 or more days before. This will drive an earlier cash arrival improving cash flow.

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