The subscription economy has changed our business life forever. It has never been easier to onboard customers, but that comes at the price of having to work hard to maintain the client and to keep a positive Customer Lifetime Value (CLV). Let’s look into the deceptive simplicity of B2B SaaS billing, and how to manage the many changes required when maintaining a B2B contract over a longer-term customer relationship.
Managing Moving Panels Over a Contract Lifecycle
Contract changes are bound to happen in B2B SaaS, they are even expected and desired. Many companies onboard customers with freemium models or lower-end price plans, and the actual growth is performed as the contract evolves.
New pricing models, changing client needs, new features, and the dynamic client-supplier relationship, in general, all impact CLV. Moreover, the way you can proactively manage these changes will be critical for your profitability. Often, the profitability lies at the tail end of your contract life cycle.
Roughly Right Is Precisely Wrong
As time-to-market is critical in the SaaS business, it is often said that roughly right is better than precisely wrong. Nothing could be further from the truth in your contract and billing process.
With pricing models that likely will change as your business evolves, contracts subject to customer negotiations, and lots of other open ends, you are about to create a headache for your administrator. What you need is a contract and billing setup that is both precisely right and flexible when things change over time.
5 Key Points When Managing B2B Saas Billing
So, what are the key elements you should take into consideration when you are looking to scale your B2B SaaS billing?
- Create a contract and billing setup that makes it easy to add new customer-specific prices and service components.
- Spend time to do it first-time-right, with the right attributes and the contract set up as a digital twin.
- Ensure system flexibility to apply changes quickly and accurately. Those can be in product and service bundling, fixed recurring fee changes, additional services, or different pricing models.
- Make sure you can easily manage adjustments and handle downgrades. Also, make sure you can manage upfront or pre-payments, reconcile and process actual usage.
- Enable your contract and billing setup to predict and mimic monetization of new offerings or changes to existing offerings.
Your Billing Digital Twin
Ideally, your billing solution functions as a digital twin of your contracts. This allows you to model your contracts with full flexibility.
A subscription management platform for B2B also gives you full insight and transparency at all times of the lifecycle, including re-pricing. Being able to capture all aspects of your contract, along the full lifecycle, is what Good Sign is all about.