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SURE! Blog

Subscription CRM and the Business Needs

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13

Dec, 2016

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For subscription-based companies, every customer touch point affects all of your second-order revenue, which is where the bulk of your company revenue lies. Because of the data-intense nature of your subscription company, you need leverage.

Unlike most standard businesses, subscription businesses are built on plans and features. Features are what most dramatically separate subscription companies from others.

Though you might have a physical product you’re offering, the notion of a subscription is a virtual one, and what you put into that subscription is largely virtual, too. You need a rich product model that lets you mix and match features according to what the market and the customer dictate, which is a radical shift from a traditional product catalog. And just as importantly, you need to be able to account for time-related things like what date the contract goes into effect, what date the service is activated, what date the customer accepts the service and agrees to be billed. These concepts need to be an inherent part of the system because time is an inherent part of subscriptions.

Customer Relationship Management:

Customer Relationship Management refers to practices, strategies and technologies that companies use to manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of improving business relationships with customers, assisting in customer retention and driving sales growth.

The Regular Customer Relationship Management doesn’t go with subscription based business hence Subscription CRM has to be implemented in such businesses to grow eventually in this competitive world.

It’s the amendments upgrades, add-ons, renewals, etc. where you make your money in the subscription economy, and nurturing your existing customers are the surest way to success.

Does the product have the right features for that particular customer context? Is the customer on the right plan for their projected usage? Or maybe you’re not actually pushing the right products or your pricing is off or your product features are off. These are the things you need to focus importantly on in these new subscription process and stratagies.

For the upgrade and add-on processes, you need to be aware of the appropriate thing to recommend to the customer at every point in their journey with your company. Do you need to give them a discount to overcome dissatisfaction? What is the appropriate discount for a loyal customer? This can be especially complex in usage-based pricing, where the usage of the customer drives a lot of the upgrade conversion.

A subscription CRM can handle this in much appropriate manner than any other thing.

Renewals are another important time when customer nurturing is the key. As you know, churn is very bad in a subscription-based business. It’s like a leaky bucket and you never catch up. This is why it is very much important to nurture your current customers so you can maximize your return on the upgrades, minimize the downgrades, and consistently earn the renewals.

Customer Relationship Management system is a tool that allows your business to manage all your customers, partners and prospects information all at one place.

What is Subscription CRM?

Subscription businesses are constantly evolving and adapting. SaaS companies update their core products many number of times a day. In a traditional business, products and services are simply purchased and invoiced: make widget, sell widget, recognize widget revenue. However, in the subscription model kind of business, billing is far more complex. Businesses have to bill new customers at sale, deal with prorated accounts, different billing dates, usage bills, etc. Without the right billing system, it can take weeks to generate bills, and errors can lead to customers fleeing in droves. Thus they require Subscription CRM which can cater to their needs.

Scaling is a huge challenge. Your bills should be accurate, simple to understand and branded appropriately. As a result, your billing system must effectively manage the many data points needed to calculate bills clearly and accurately.

Most Used and Desired Features of Subscription CRM:

Traditional GAAP reporting won’t go away soon, but subscription businesses must also focus on metrics like ARR, retention rate, recurring profit margin, and growth efficiency index to be successful. Make sure you set up a dashboard to track these important subscription finance KPIs from the outset, and check them frequently.

The companies should have enterprise-grade system with services that are built on a safe, secure, mission-critical, and scalable infrastructure. Your system should have 24*7*365 operations and assured business continuity. All companies need seamless integrations with commerce systems, payment gateways, and other technology systems.

Flexibility and customization:

Subscription CRM most looked after feature is that it’s customizable and flexible. Its ability to customize is simple, straightforward.

Integrated analytics:

It is not enough to collect data specifically for a subscription business; here it’s important that CRM solutions must provide business users with access to decision-making analytics, both for sales and for marketing. Subscription CRM helps to select campaigns, target consumer groups, define and apply treatment strategies, to measure results across multiple channels both online and off-line and build results back into the planning process for future campaigns.

An integrated analytics platform is an integrated solution which brings all together performance management, analytics and business intelligence tools under one single package.

Stronger multichannel support:

A service phone number is essential and not just online help; instant chat lines also help in supporting the customer and manage their queries. A Subscription CRM helps in Call Center Automation and Integration thus you can Control your call center from your CRM UI and integrate any third party program into a single platform.

Customer Case Management:

A subscription CRM helps to manage each customer case individually and efficiently to improve customer satisfaction levels.

How are businesses getting benefited from subscription CRM?

The way around the problem is to have at-your-fingertips access to all of your customer subscriber information. Information such as what types of products and services a customer uses, whether a customer has any outstanding invoices, when did they last downgrade or upgrade, or even something as simple as what do they own and what does that say about them. Your teams will have much more success when they’re armed with the right data.

And this type of 360-degree view helps you way beyond customer management.

Subscription CRM is helping businesses to do that with just few steps:

It’s helpful as in for example, once you have information about your customer, you could actually build something that lets you submit a customer’s billing account history, payments, refunds, and all of their other interactions with you to a credit agency, and the agency could actually give a credit assessment as to how likely that customer is going to pay.

Subscription CRM helps in Keeping your front-office and back-office in sync at all times:

Subscription companies generate more bills, more payments, and more transactions of all kinds. And while we’ve been talking a lot about keeping customers happy by having up-to-date information at the ready, your front-office and sales teams need this information just as much. Your sales teams are out there working hard, getting sales and bringing home the bacon for the company. Your billing and accounting folks are making sure you meet audit requirements and that the reporting is accurate when they go to senior management.

To reconcile these two worlds subscription CRM plays a pivotal role.

Top industries that use CRM software

Top industries that use CRM software

Source: www.capterra.com

Why Subscription CRM is needed more than a regular CRM:

Although it’s possible to manage the SaaS (Software as service) sales structure with an old fashioned Lead-Contact-Opportunity model, the limitations are exposed in on boarding automation and opportunity’s revenue model. Signup-Customer-Subscription model is more about automated on boarding, user conversions and recurring revenue than cold calling, contacting and transactional fees. That’s why a CRM for SaaS must be built on full automation and subscription management – supported with smart sales bots for behavior based contacting instead of contact or deal database for traditional customer relationship management.

Regular CRM process was evolving during the era of cold calling when at the time of closers coffee was offered. That’s why the most important data in a sale CRM is lead’s or customer’s contact numbers and conversations. For SaaS companies conversations are also important, but instead of customer’s contact details they want to see customer’s activity inside our SaaS products. They talk about users, not contacts. User activity information allows SaaS salespeople to recognize and proactively reduce churn already before user leaves trial or cancels subscription.

The most obvious difference between regular CRM and SaaS CRM is the revenue model: License based fees vs. Recurring revenue. How to define Software as a service metrics if your CRM is based on transactional opportunities or fee based deals? Monthly recurring revenue that is the core of SaaS business and everything must be built to support it. Otherwise it becomes very difficult to calculate the real value of your customers and growth.

The software is headed towards improvement with every passing year, increasing number of CRM platforms with more equipped technology is the future which will have more predictive analytics capabilities which will automatically update customers of the offers and reduce churn rates.

Though it’s difficult to predict where the technology will lead to in another decade’s time but for now the more accurate analytics tools the better customer experience.

Subscription CRM has come in as a breather as it’s more supportive than a regular CRM and has been helping businesses already.

By : Vishal Pokala

Vishal Pokala is The Marketing Research & Strategic Manager of SURE! (a Magnaquest product). SURE! is an internationally acclaimed player in comprehensive end-to-end Subscription Business Solutions for PayTV, Broadband and Cloud Computing businesses – through deployment of Metered Billing, CRM, Service Fulfillment, Value-Added Services, and Managed Services.

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