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Subscription Management Platform Makes Recurring Revenues Possible

Subscription Management Platform Makes Recurring Revenues Possible

Forbes recently released an article about the Relationship Between Revenue Operations And Recurring Revenues.

The article emphasized the importance of revenue operations in the subscription economy and introduced ways to transform a company into a recurring revenue model.

This blog will explain the importance of a subscription management platform in building revenue operations. We’ll review how the platform is crucial for adapting to the recurring revenue model.

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If you’re unfamiliar with the concepts, Revenue Operations means aligning marketing, sales, and customer success to increase revenue. Recurring Revenue is generated when customers subscribe to a service billed over time. E.g., once a month.

The high-growth subscription economy

But why should a company embrace recurring revenues?

Companies with a subscription business model typically have high growth rates, and having steady, predictable cash flow is welcomed by any company. It’s worth noticing that during the last decade, companies adapting to the subscription economy have become more valuable than rivals holding on to one-time sales.

However, transforming a business into a recurring revenue model is challenging. Pulling it off requires proper tools, business systems, and competent leadership.

So, how a subscription management platform helps a company to set up revenue operations and transform its business into a recurring revenue giant?

Let’s find out!

Standard metrics for every department

An essential aspect of developing revenue operations is to have all the departments strive toward a common goal. With a subscription management platform, all the departments have equal access to customer data and insights. Revenue operations can follow the metric trajectory in real time if they attempt to increase, say, MRR.

The subscription management platform also reveals growth opportunities. For example, churn rates are likely lower in specific customer segments, industries, or company sizes. A company can fine-tune its ideal customer profile with subscription management platform data and focus sales on more profitable leads.

Maximizing the Customer Lifetime Value

In the recurring revenue model, revenue generates not only when the deal is closed but throughout the customership. Average customer acquisition cost (CAC) depends on the industry, but it’s often at least worth a few months of subscription fees. Anyway, the longer the customership lasts, the more profitable it gets.

The Subscription Management Platform enables revenue operations to see essential customer information that helps prevent churn, gain more profitable customers and increase Customer Lifetime Value (CLV). Improved visibility to the customer base also reveals new upsell possibilities.

Accurate insights to make decisions on

The purpose of revenue operations is to streamline the customer funnel between departments to generate more revenue. To achieve this goal, departments need a reliable source for customer information and insights. The information must always be up-to-date, accurate, and available for every department.

The subscription management platform contains customer contracts, subscription details, billing rules, and user information, and it is readily available for as many users as needed. All the data accumulates through API integrations, and no manual work is required. For example, the system will immediately refresh the ARR if a customer adds more users or features to the subscription plan.

Managing the customer journey

Customer-specific adjustments are frequently required as preferences change. If a company has hundreds of customers, and most have unique contracts, handling them by hand is a monumental task and prone to mistakes. Also, a contract too cumbersome to modify encourages a customer to find a new service provider.

Revenue operations need to have a view of the customer journey and the ability to make customer-specific changes with minimal effort. Using legacy solutions built before the time of the subscription economy will not cut.

With a subscription management platform, customer preference changes automatically affect the contract and billing without manual work or mistakes. Without automating this process, the company will leak revenue.

Recurring revenues require subscription management

A subscription management platform alone won’t beat the competition, but it eases the chaos of managing customer contracts and billing.

Firstly, it automates the process and releases people to work on tasks that are better suited for people. Because of the complexity of the subscription economy, it’s nearly impossible to handle the process by hand. Automation dramatically increases satisfaction and customer lifetime value while decreasing reputation-hurting billing mistakes.

Secondly, a subscription management platform contains tons of data necessary for revenue operations and adapting to a recurring revenue model. This information is valuable for management, helping them to make crucial competition-beating decisions.

Read more about transformation into a recurring revenue business model. 

guide to recurring revenue business models

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