If you run a SaaS company, you must have felt the pain of customer churn. There can be many reasons why customers are leaving, but more often than not, one of the main factors is how you manage subscriptions. Do your subscribers have payment options? Can they pause their subscriptions? Do they have a good user experience?
These are all important questions to answer because subscribers are at the heart of your SaaS business. Thanks to their subscription payments, you can enjoy the perks of having a recurring revenue. So whether your clients will stay on, upgrade, or cancel their subscription will largely depend on how well you handle subscription management. Let us begin with what that entails.
What is SaaS subscription management?
SaaS subscription management covers the entire customer lifecycle; this includes all subscription-related operations from signup to cancellation. The main goal of subscription management is to take care of existing customers and ensure they remain subscribed to your service, regardless of your chosen recurring revenue model.
Why is SaaS subscription management important?
Two reasons: customer retention and scaling. First, SaaS subscription management is vital because retaining existing customers is usually much cheaper than gaining new ones. Successful subscription management equals customer retention, so for any SaaS company wanting to leave a lasting impact, subscription management has to be handled with care.
Second, the more subscribers you retain, the more certainty you have when scaling your business and securing your position in the market.
In other words, from the moment a customer subscribes to your service, you begin a relationship. Your goal then is to foster that relationship and make it a great one. There are a few key steps you can take to successfully scale, manage subscriptions and keep those relationships blossoming.
1. Make it easy to sign up, hold or cancel
Customers should not struggle to make changes to their subscriptions; it should be easy to sign up, modify their subscription plan, pause, or cancel anytime. A sense of control over their subscriptions will give your customers a much better experience.
You may be thinking that effortless cancellation sounds dubious. After all, who wants their customers to cancel? Indeed, it is still not too uncommon for companies to attempt to hide cancellation options, make them tricky to find, enforce waiting periods, etc.
For example, if you own a Netflix account and have tried to pause or cancel it (with the multitude of other streaming options available, we are all guilty of it), you may have experienced that it is all a matter of clicking a couple of buttons. This gives customers a sense of security and trust, and there is a big chance they will return.
The truth is, long-term relationships with customers are based on trust, and the easier they can cancel, the better they will feel about your brand. Your customers’ needs change, just like yours, and they may reactivate their accounts later. In the meantime, give them the flexibility they need today by implementing a dedicated subscription management solution.
2. Provide a friendly UX
This one is not about having a pretty website and tons of features. It is about clarity. When customers press a button that says “buy,” they immediately want access to your product or service. Do not make them wander around looking for how to make the purchase.
Combine a straightforward user journey with transparent and flexible pricing, and you will onboard satisfied subscribers. With a subscription management platform like Upodi, you can also easily handle proration and increase cash flow income during upgrades.
3. Put more focus on customer communication
Knowing your subscribers is key if you want to predict and react to their behavior. Be it invoicing or dunning, communicate respectfully and on time to ensure customers are taken care of and payments go through (more on payments later).
Various customer-related insights and SaaS metrics such as Customer Acquisition Cost (CAC) can be collected from your subscription management software, enabling you to get closer to your subscribers every day.
4. Minimize failed payments (and churn)
Payment failures are one of the main reasons why SaaS customers churn. In fact, between 20-40% of churn cases happen due to payment delinquencies. So to achieve success in subscription management, you will also need to smoothen out the creases in recurring billing.
A platform that combines both recurring billing and subscription management lets you set up automated charge claims, reclaims, and dunning. This can help you minimize any technical obstacles your customers might face while making payments.
Your subscribers should also be able to pay using a payment method of their choice. Ensure your chosen recurring billing and subscription management solution makes it possible to pick from a variety of payment providers, be it Stripe, Klarna or MobilePay.
5. Make sure your billing and subscription systems are in sync
The most crucial step for a successful SaaS subscription management is automation. And if you decide to pick an automation system to manage your subscriptions, ensure it fits in with your existing ecosystem.
A subscription management platform that requires you to change your existing tools might not be the right choice. Upodi offers a streamlined solution to manage your recurring billing and subscription operations. The platform integrates seamlessly with most accounting ERPs (Enterprise Resource Planning) and any PSPs (Payment Service Providers) you might need.
The sync between your billing and subscription management will ensure there are no unnecessary technical roadblocks for scaling with ease.
Manage your subscriptions with Upodi
As you scale and your subscriber numbers increase, you want to be ready to confront the emerging challenges and safeguard against churn while growing your business. Your chosen subscription management software has to scale with you to accommodate the increasing billing complexity.
Upodi is a modern, reliable subscription management software that assists you in managing all the activities involved in a subscriber’s lifecycle from signing up to cancellation. Manage free trials, upgrades, or downgrades, experiment with pricing, and take care of recurring billing, dunning, and customer communication with one single platform.
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