Revenue stream optimization is on the agenda of each company that offers subscriptions. By implementing effective subscription management strategies, it’s possible to improve your bottom lines tremendously while exploring growth and development opportunities.
By 2030, the global subscription billing management market size Is expected to reach $17.95 billion. It’s growing at a CAGR of 16.1%. This impressive growth means that business owners need to pay more attention to subscription management. Otherwise, they are likely to fall behind the competition in the nearest future.
Let’s take a closer look at effective subscription management strategies that can help you optimize revenue streams.
1. Let Clients Try the Product First
Before managing the subscription, you need to make sure that your audience is getting what it really needs. To do that, you have to provide an opportunity to try the product before buying it.
Free trials are an excellent way to market your product and make sure that consumers stay with the company. It eliminates people who aren’t interested in your subscription at the earliest stages of the relationship. This saves time and money for both parties.
While arranging a free trial, pay attention to the complexity of the subscription structure. Keep the plans as easy as possible. You can implement cross-selling and upselling tactics once you secure a client’s loyalty. If you start providing complex plans with many elements from the start, it’s easy to scare the potential user away.
2. Make Renewals as Easy as Possible
Prescription renewals are key to optimizing revenue streams for a subscription business. Unfortunately, only a few companies pay sufficient attention to the renewal process. Many clients don’t know about the renewal options in advance and may lose access to the services unexpectedly.
Whether you are leveraging usage-based billing or have a fixed monthly rate, renewing a prescription should be highly intuitive. The client should get consistent automatic reminders about the need to renew the service.
Consider enabling clients to auto-renew. If you make it easy for the user to do this, they are more likely to stay with the company.
As soon as they lose the subscription because it expires, they get a reason to shop around. It can be much harder to re-engage these clients than to ensure a seamless subscription renewal process.
3. Work on Upselling Opportunities
Upselling is an integral part of successful subscription-based business operations. It’s one of the easiest and most effective ways to streamline revenue streams. You can take advantage of AI-based tools to prepare upselling options for your existing clients.
While each user deserves a personalized approach, companies that deal with hundreds or thousands of clients have to rely on automation. This requires robust data collection and in-depth analytics of each user.
By collecting customer data continuously, you are gaining the foundation for valuable upselling insights. When you make the right offer at the right time, the success rate of upselling can be extremely high.
4. Maximize Cross-Selling Efforts
Similar to upselling, cross-selling tactics have a significant effect on your revenue. By monitoring the client’s needs, you can find opportunities for cross-selling and promoting the rest of your products.
Without the right tools and tactics, only one in five organizations manage to achieve their cross-selling goals. Subscription-based businesses with a limited number of products have a harder time doing this.
Invest your effort into customer research and take a personalized approach to choosing the ideal time and product for cross-selling.
5. Monitor Account Information Closely
Users tend to change their billing information. For example, they lose a credit card and issue a new one or their debit card expires. Each month, you could be losing around 5% of your users simply because they forget to renew their credit card data.
To prevent these clients from leaving automatically and shopping around for better options, you need to make sure the information is updated. To do that, monitor all billing details regularly and ask customers to update their information before subscription renewal.
Different technologies and tools exist to monitor the billing information and adjust it according to the latest changes. By staying on top of these updates, you are minimizing the chances of losing clients because of billing errors.
6. Implement Custom Billing Intervals
The easiest way to bill your clients is to set the same billing interval and date for all of them. However, this can keep some of your clients from renewing their subscription.
Each client’s situation is different depending on what day of the month they are paid. If your payment date is right before the salary comes in, your risk losing the subscription simply because the customer doesn’t want to use the money they have left for your services.
The best approach is to ask your customers when and how they prefer to be billed. This can improve the retention rate tremendously and keep users happy.
Keep Revenue Streams Open
Subscription-based businesses face a wide variety of challenges that often keep them from optimizing their revenue streams. By taking a comprehensive approach to customer and subscription development, you can improve client retention rates and advance with cross-selling and upselling options.
Don’t hesitate to take advantage of the latest subscription management tools to gain data-driven insights into your company’s operations while discovering new opportunities for retention.
