SaaS ProvidersSubscription Service Providers

Overcome these 5 subscription business challenges that stop your business from scaling

6 Mins read

Are you a subscription-business owner? If so, then you’re likely familiar with one of the major subscription business challenges – the inability to scale.

Subscription businesses are here to stay. As per a recent study by Gartner(1), all new software entrants and 80% of historical vendors are offering subscription-based business models.

Setting up a subscription business – is the first step. Everything will go smoothly – from acquiring customers to managing sales, marketing, invoicing, etc. Primarily because you have a limited number of customers when you start the business. However, soon you might hit a point – where you will start facing problems like customer churn, reduction in new customer acquisitions, inability to manage recurring billing, and more. Thus, comes the inability to scale. You will face issues managing growth and retaining customers while keeping the offerings cost-effective.

Successful subscription businesses take this as an opportunity to innovate.

By innovating on time and using various strategies you can fuel your subscription business for long-term prosperity.

In this article, we’ll dive deeper into subscription business challenges that can stop your business from scaling.

How do you scale a subscription business? – Overcoming top subscription business challenges

For any subscription business, scaling isn’t just about increasing revenue; it’s about building a sustainable and successful business that meets growing customer base and needs.

Growing your subscription business requires a well-defined strategy for navigating the many complex challenges of acquiring and retaining customers as a continuous cycle.

Let’s look at some of the scalability challenges of subscription businesses and strategies that can help you overcome them:

1. Overcome the recurring billing challenges

Growing subscription and SaaS (Software-as-a-Service) companies usually struggle with recurring billing challenges. The inability to manage the billing and invoicing might leave you with a high churn rate and new customer acquisition costs.

Here, the major challenge is an unscalable billing infrastructure.

If you are using an in-house billing solution, it might be a good solution for the short term. As your customer count grows, it will slow down your entire business.

Recurring BIlling Challenges

When we talk about subscription businesses, you’re dealing with different billing cycles, upgrades, payment methods, price changes, etc. This complicates the billing process. Not to mention, the time sensitivity that you must take care of. If your billing solution is generating an invoice in days – it may hinder the growth or scalability of your subscription business.

The solution

Invest in modern subscription billing management software. It will bring intelligent end-to-end subscription management and billing into a unified platform.  Learn more here.

Suggested Reading: How to choose a great subscription billing software to manage your business?

2. Focus on enhancing the customer experience

One of the major benefits of a subscription business is faster delivery of services. The underlying foundation of such a business model is great customer experience. Immersive customer service is the key to the long-term success of your subscription business.

28% of subscribers consider personalized experience as the most important reason for continuing to subscribe – Report(2).

Take the example of Amazon Prime membership here. People who have subscribed to the premium service, receive a lot of benefits focused on enhancing their experience with the service. One-day or same-day delivery, free shipping, and early access to mega sales are some of the benefits to consider.

These benefits can in the long run bring the benefit of brand loyalty to the company. Without these benefits, the service will lose its value and eventually the subscribers.

The solution

Work on customer communication areas that need improvement.

Meeting customer requests on time, communicating offers and discounts, offering multiple channels of communication, and unifying everything for a smoother process – are key strategies to build a great customer experience.

As per research(3), even a 5% increase in customer retention can boost profits anywhere from 25-95%. And it can happen only when you improve the customer experience.

Give control in the hands of customers via a customer self-service portal through which the customers can self-manage services, billing, and support requests.

  • Provide quick action service links to open a support ticket, renew a service, upgrade/downgrade, add add-ons and do a lot more.
  • Provide billing information, like ledgers, orders, invoices, logs, and quick links for placing orders, adding funds, and more.
  • Provide support communication logs – including emails, chats, and tickets through a single click in the dashboard.

3. Go beyond a simple CMS – consider a marketplace with end-to-end automation

For any subscription business, a content management system (CMS) is important. However, it is not enough.

Let’s understand why?

For the unversed, a CMS is a software solution that allows you to manage, create, and modify content on a website.

For any eCommerce or rental business, having an online presence from where a visitor can browse the products, add products to the cart, checkout, etc. is important. A CMS helps you do that. However, when it comes to subscription businesses, there is a lot else you need your CMS to do. This includes:

  • Ability to cross-sell or up-sell from the same checkout page
  • Manage recurring billing and invoicing
  • Manage lifetime product tracking

Not all CMS solutions support the above services. Even if they do manage to do these with third-party integrations and all – it does not let you have a complete view of the process.

The solution

What you need is software that goes beyond a simple CMS – Subscription Management Software with marketplace.

Subscription Business Challenges

It will help you gain an in-depth view of the entire customer and product life cycle. Track products, manage payments, upsell, cross-sell, apply discounts and offers, send customized invoices, track sales and marketing campaigns, send payment reminders, and everything you need to run and scale a successful subscription business.

4. Deliver in seconds – instead of days

We all remember the time when we used to rent CDs and DVDs of our favorite movies and albums. We used to either rent it from a local shop or order it online. It took 2-3 days or even more depending upon the availability.

The era of on-demand videos changed this model. Today, we watch and subscribe to streaming services like Netflix, Disney Hotstar+, etc. Everything is just a click away. Now waiting even for a few minutes to watch your shows seem like a hassle.

The same goes for other forms of subscription businesses. Your customers too want delivery within seconds. If somebody subscribes to a service or software solution, they expect the onboarding to take place within minutes. Even online grocery shopping companies like Blinkit are working on improving supply chain cycles to be able to deliver groceries to their customers within minutes of order placement.

This might be a challenge for you – if you are still relying on manual operations. Manual customer onboarding and invoicing will slow down your delivery time – eventually resulting in customer churn.

The solution

Automate your order processing and onboarding. Have a system in place that allows you to onboard new customers in less than seconds. As soon as the person subscribes to your service, the system should take care of everything from sending the welcome mail to helping them set up an account and manage their subscriptions with you.

An automated subscription management platform will help you meet your subscribers’ orders in real time.

5. Be future-ready – overcome lack of extensibility with integrations

Integrations are an essential part of modern subscription products, allowing them to be tailored to each customer’s needs and preferences. If your current subscription management platform is not able to provide integrations with leading industry software, it can hinder your growth.

Let’s simplify this by taking an example of payment gateway integrations. When a person subscribes to your service, he/she may be using a different payment gateway than what you are offering. Now, in a highly competitive marketplace, customer always has the option to go with some other provider to save themselves from the hassle of setting up a new payment account.

On the other hand, if your marketplace was integrated with almost all popular payment gateways, the customer would have the option to choose the one he/she is comfortable with.

By allowing integrations, you can provide a more personalized service that makes the overall experience smoother and of better quality.

The solution

When selecting a subscription business or recurring billing platform, go for software that offers you integration support with third-party software solutions. This way, you do not have to work with different individual software and decentralized data. You can use a single software to meet all your needs.

Conclusion: Overcoming subscription business challenges

Subscription businesses are booming, but not without their challenges. By understanding the common scalability issues and implementing best practices, you can overcome these hurdles to ensure long-term success for your business.

If you want help getting started, book a demo with us today. We’ll show you how our software can help streamline your subscription management process and take the burden off your shoulders. Don’t do it alone – let us help you grow your subscription business into a thriving enterprise.

Read Next: Top 10 Best Subscription Management and Billing Software Compared





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