Today, we’re breaking down the benefits of having a Deal Desk for subscription-based businesses and getting into strategies for managing recurring revenue, subscription pricing, and customer retention within Deal Desk processes (plus, we’ll discuss DealRoom – a game-changing platform that optimizes Deal Desks in your organization). Let’s go!

Benefits of a Deal Desk for subscription-based businesses

Before we break down typical challenges associated with managing subscriptions, let’s break down the tangible benefits of nurturing a Deal Desk for SaaS and B2B subscriptions.

Help close high-value deals

Deal Desks are instrumental in closing high-value deals in subscription-based businesses. However, deals often involve complex pricing structures, contract negotiations, redlining, and customization options. Deal Desk teams can navigate these complexities by leveraging their expertise to ensure that both parties reach a mutually beneficial agreement. Deal Desks, therefore, contribute to continued revenue growth and customer satisfaction by streamlining the deal closure process.

Shorten the sales cycle

When it comes to B2B subscription-based business models, speed is of the essence. Customers expect a seamless, transparent, efficient buying experience with quick turnaround times. Deal Desks are pivotal in shortening the sales cycle by eliminating bottlenecks and ensuring smooth transitions between sales stages. The ability to swiftly handle pricing, contract revisions, and approvals can expedite the buying process, which increases the chances of converting prospects into loyal customers.

Efficiently manage approvals

The Deal Desk is the hub for approvals within a subscription-based business, centralizing processes to simplify workflows. Deal Desks collaborate with multiple stakeholders to ensure a seamless approval process from pricing adjustments to contract terms. By establishing streamlined workflows, centralizing processes, and leveraging technology, Deal Desk teams are able to efficiently manage approvals. This, in turn, reduces delays and improves the overall operational efficiency.

Collaboration with stakeholders

The effective collaboration between Deal Desk teams and various stakeholders is vital for success. Deal Desks act as the bridge between sales, finance, legal, and customer success teams. Their ability to gather insights from all parties and align stakeholders’ objectives ensures focused messaging, internal collaboration, and more predictable revenue growth. Deal Desks, in short, ensure everyone is on the same page, resulting in better customer experiences and increased revenue potential.

Overcoming the challenges in managing subscriptions

As mentioned, while subscription-based models offer significant benefits, the management process can be challenging. There are solutions that, when implemented, reduce complexity and lessen the strain of tedious administrative tasks. So, let’s get into some key challenges and strategies that Deal Desk teams can employ to overcome roadblocks.

Challenge #1: Managing recurring revenue

One of the fundamental challenges in managing subscriptions is maintaining a steady stream of recurring revenue. Companies rely on predictive revenue sources to ensure the proper internal resources are in place and to plan for future growth. Recurring revenue makes it possible to predict cash flows, so finding ways to maintain a steady subscription stream is crucial. 

Strategies for Deal Desk teams

To address challenges related to maintaining a predictable level of recurring revenue, Deal Desk teams must focus on optimizing the subscription lifecycle. Teams need to implement proactive renewal strategies and adopt solutions such as: 

• timely reminders
• customer success reviews
• renewal incentives
• personalized offers
• upselling opportunities

That way, Deal Desks can maximize customer retention and revenue growth. It’s also an ideal way to meaningfully engage with clients, build relationships, and personalize interactions.

Challenge #2: Managing subscription pricing

Setting the right pricing strategy is crucial in the subscription economy. Customers are price-sensitive and will abandon their subscriptions if they no longer see value in the service. Therefore, pricing must be flexible and dynamic while still addressing customer expectations.

Strategies for Deal Desk teams

Deal Desk teams need to strike a balance between profitability and competitiveness. To overcome this challenge, they can: 

• leverage data-driven insights to determine optimal pricing structures
• offer flexible plans
• create value-added bundles
• maintain pricing transparency to build client trust

By continuously monitoring market trends and competitor pricing while offering flexibility and value to their offering, Deal Desks can ensure their subscription pricing remains competitive and attractive to customers.

Challenge #3: Customer retention

Customer retention is the cornerstone of success in the subscription economy. If customers are unhappy, see competitors’ pricing as more flexible or affordable, or feel undervalued, they likely will start considering other options. Deal Desk and Customer Success teams must collaborate to retain customers and drive revenue. In order to do that, they must seek out value-added options to entice customers to renew subscriptions.

Strategies for Deal Desk teams

There are a variety of ways Deal Desks and Customer Success teams can source unique opportunities to secure a renewal. For example, by:

• analyzing customer usage patterns
• gathering customer insights and opinions
• monitoring customer success metrics 
• identifying upselling and cross-selling opportunities
• providing personalized recommendations
• ensuring proactive issue resolution

Deal Desks can enhance the customer experience and provide Customer Success teams with approaches that will ultimately drive revenue growth.

Driving revenue with Deal Desk – Customer Success (CS) collaboration

To achieve long-term revenue growth, fostering collaboration between the Deal Desk and Customer Success teams is crucial. Together, these teams can effectively manage contract renewals, upselling, and cross-selling opportunities. For example, here are two key areas where effective collaboration will drive revenue:

Increasing contract renewal rate

Deal Desks can source and implement proactive strategies to increase contract renewal rates in collaboration with Customer Success teams. By leveraging data and analytics, Deal Desks can identify potential churn risks, and Customer Success teams can engage with customers before renewal dates to promptly address any concerns or challenges. This collaborative approach of engaging proactively ensures Customer Success teams can reach out to customers strategically to reinforce the value of continuing subscriptions, leading to lower churn, higher renewal rates, and sustained revenue growth.

Expanding deals with upselling and cross-selling

The Deal Desk and Customer Success teams can work hand in hand to identify upselling and cross-selling opportunities. By analyzing customer usage data, understanding their evolving needs, and providing tailored recommendations that Customer Success teams can leverage, Deal Desks contribute to driving the expansion of recurring revenue. When continuously seeking proactive up and cross-selling, Deal Desk teams can provide Customer Success teams with information regarding the additional value customers can gain by upgrading their subscriptions or availing of complementary products or services. This way, Customer Success teams can continuously nurture relationships to build customer trust while increasing revenue.

DealRoom: empowering Deal Desk subscription management for revenue growth

To unlock the full revenue potential of a subscription-based business, DealHub’s DealRoom offers a comprehensive solution that facilitates ongoing success for Deal Desk teams. DealRoom provides a centralized platform so that Deal Desks can manage every aspect, including managing subscriptions, streamlining approvals, collaborating with stakeholders, and gaining actionable insights. With an intuitive interface and its robust list of features, DealRoom empowers Deal Desk teams to optimize their subscription management processes, close deals faster, drive revenue growth, and deliver exceptional customer experiences.

Final Thoughts

Deal Desk plays a vital role in subscription-based businesses by unlocking revenue potential and overcoming unique challenges. By efficiently managing high-value deals, shortening the sales cycle, streamlining approvals, and collaborating with stakeholders, Deal Desk teams contribute to revenue growth and customer success. Through collaboration with Customer Success teams and leveraging technologies like DealHub’s DealRoom, Deal Desks can effectively manage contract renewals, upselling, and cross-selling opportunities while engaging with stakeholders and increasing transparency. This powerful centralized approach to managing Deal Desks will ultimately lead to sustained revenue growth in the subscription economy.

The post Deal Desk: unlocking the revenue potential of subscriptions appeared first on DealHub.

Therefore, businesses need a robust subscription billing platform that can overcome challenges and capitalize on the benefits of subscription-based models. Such a platform simplifies billing operations, improves cash flow, increases customer satisfaction, and enables data-driven decision-making. In this article, we’ll explore the four essential features that the best subscription billing platform should have to ensure success.

How a subscription billing platform builds recurring revenue

Before we delve into the key features a platform must have, let’s review how a subscription billing platform assists in the process of building recurring revenue. 

First and foremost, it automates the billing process, saving valuable time and resources. With automated invoicing, businesses can generate accurate and timely invoices for various recurring billing models, including:

• Flat-rate pricing
• Tiered pricing
• Usage-based, and 
• Freemium models

The best subscription billing platforms also reduce errors significantly compared to manual invoicing. Imagine the time and effort saved when your invoices are generated automatically. Once automation is in play, sales teams can eliminate manual errors and delays. With a billing and subscription management platform that supports automated invoicing, you can streamline your billing process, enhance accuracy, and promptly send invoices to customers. This not only saves valuable time – it also strengthens cash flow by expediting the payment collection process.

In addition to automating invoicing, a subscription billing platform provides a centralized system for managing customer subscriptions. It enables businesses to track and monitor subscriptions and renewals, upgrade or downgrade plans, and seamlessly manage cancellations. When your sales team has a clear overview of your customer base and subscription status, they can proactively engage with clients, address their needs, and optimize revenue opportunities.

The best subscription billing platforms have these 4 features

​​The best subscription billing platforms are designed to address the unique challenges businesses face in managing recurring revenue models. Let’s take a closer look at how key features of software subscription billing solutions can solve these challenges and deliver substantial benefits via these four essential features.

1. Automated invoicing

Manual invoicing that relies on a salesperson actioning items and handling admin is time-consuming, error-prone, and causes delays. On the other hand, a subscription billing and recurring billing platform automate the entire invoicing process to ensure accurate and timely delivery of invoices. Whether you have a large customer base or a complex billing structure, automated invoicing saves sales representatives from the tedious tasks of manually generating and sending invoices.

Furthermore, automated invoicing is more flexible since it supports a variety of recurring billing models. Whether you charge a flat rate for your services, have tiered pricing based on usage or features, offer a freemium model, or any combination thereof, a robust subscription billing and recurring billing platform can handle it effortlessly. It adapts to your billing needs, generating invoices aligning with your pricing structure.

By automating invoicing, businesses benefit from improved cash flow. Prompt and accurate invoicing means faster payment collection, reducing the time between generating an invoice and receiving payment. This accelerated cash flow positively impacts a business’s income while allowing the company to allocate resources effectively and invest in growth initiatives.

2. Flexible payment options

In today’s digital landscape, customers expect a business to provide them with options when it comes to payment. A subscription billing and recurring billing platform offering diverse payment methods align with client expectations, enhancing customer satisfaction and reducing churn.

With more flexible payment options, businesses can accommodate many customer preferences simultaneously and give them a sense of control. That’s why your SaaS subscription billing platform should support a range of payment methods. By giving them the freedom to pay with credit cards, digital wallets, or bank transfers, customers can arrange payment in a way that’s comfortable for them. And, by offering the payment methods customers already use and trust, you remove any barriers to subscription adoption and retention.

A subscription billing platform should support recurring payments, allowing customers to set up automatic payments. This feature ensures a seamless and hassle-free payment experience, reducing the risk of payment failures due to expired cards or forgotten manual payments. That way, businesses can maintain a steady revenue stream and improve customer retention rates by simply streamlining the payment process.

3. Robust analytics capabilities for revenue recognition

Businesses need to harness the power of data to maximize the potential of a subscription-based model. A SaaS subscription billing platform with strong analytics capabilities empowers businesses to act based on actionable insights into customer behavior, subscription trends, and revenue metrics.

Businesses can gain a profound understanding of their customer base by collecting and analyzing data on customer usage, preferences, and engagement. This knowledge enables a company to further develop its service or cater its offerings to align with client expectations. It also provides insights that lead to more targeted marketing efforts, personalized offerings, and effective customer retention strategies. For example, if the analytics reveal that a particular group of customers is underutilizing certain features, businesses can develop targeted campaigns to encourage feature adoption and upsell opportunities.

Robust analytics capabilities aid in accurate revenue recognition as well. By tracking and analyzing revenue data in real time, businesses can ensure compliance with accounting standards and regulations. This level of financial transparency instills customer trust and safeguards businesses from potential legal and financial implications.

The best part: analytics-driven insights optimize pricing strategies and identify areas of revenue leakage. By identifying trends, patterns, and anomalies in the data, companies can adjust their pricing tiers, introduce new plans, or implement targeted promotions to drive revenue growth. These data-driven decisions are crucial to staying ahead of the competition and maximizing the value of the subscription-based model.

4. Built-in control and compliance 

Effectively managing subscription billing requires control and compliance. A reliable subscription billing platform should allow businesses to quickly set up and manage their billing processes across all departments. Look for features that enable you to define pricing structures, manage subscriptions, apply for discounts or promotions, and configure billing cycles effortlessly.

Moreover, compliance with industry regulations is vital for businesses operating in subscription models. Ensure your SaaS subscription billing platform adheres to industry standards, such as GDPR (General Data Protection Regulation) and PCI DSS (Payment Card Industry Data Security Standard). Any platform you choose should provide robust security measures to protect sensitive customer information to protect both a client’s data privacy and your organization’s regulatory compliance.

Comparing subscription billing platforms

When handling a subscription billing platform comparison, it’s essential to consider a few critical factors in order to make an informed decision:

1. Ease of use: A user-friendly interface and intuitive navigation are crucial for maximizing productivity across the sales team and minimizing training time when onboarding. Choose a platform that can efficiently manage and automate your billing operations without requiring extensive technical expertise.
2. Integrations: Evaluate the platform’s integration capabilities with your existing systems, such as CRM (Customer Relationship Management) and accounting software. Seamless integration ensures a smooth flow of data and reduces manual effort.
3. Implementation time: When it comes to sales, time is of the essence, and a lengthy implementation process can disrupt operations. Opt for a billing and subscription management platform that offers a quick and straightforward implementation, allowing sales teams to start generating revenue without unnecessary delays.
4. A low-code solution: Look for a platform that can customize options through a low-code approach. This allows you to adjust the platform to your business needs and make changes without relying heavily on technical resources or coding expertise.

Conclusion

When managing subscription billing, it is crucial for businesses to embrace subscription-based models. This approach will help drive sales and increase efficiencies. However, before jumping in, it’s important to take time at the outset to run a subscription billing platform comparison, do a POC, and zero-in on features that will make setup and adoption a snap. 

In the long run, a billing and subscription management platform becomes invaluable by automating invoicing, offering flexible payment options, and providing robust analytics capabilities. The key features of software subscription billing enhance cash flow, increase customer satisfaction, and enable data-driven decision-making, paving the way for sustainable growth and long-term success. 

When comparing platforms, consider factors such as ease of use, integration capabilities, implementation time, and low-code design to find the perfect fit. Once you embrace the power of a subscription billing platform, you’ll unlock the full potential of your subscription-based model. That doesn’t just make your sales teams more efficient over time – it makes it possible to incrementally grow sales and continuously adapt to changing market expectations.

The post 4 essential features your subscription billing platform should have appeared first on DealHub.

Indeed, in our 2021 benchmark report for revenue leaders, 75% of surveyed companies reported earning most of their revenue from subscriptions. One of the main reasons for this is that securing new customers can cost 5 to 10 times more than selling to existing customers. And existing customers spend, on average, 67% more than new customers. 

However, every company handles subscriptions a bit differently. In this article, we take a look at four subscription-based pricing models, including considerations to help you determine whether you’re using the best pricing model for your own product or service. 

What is subscription-based pricing?

Subscription-based pricing is a payment framework that enables customers or businesses to purchase and subscribe to a vendor’s products or services over a specific period of time, and for an agreed amount price. Usually, these customers commit to subscription services on a monthly or annual basis. 

Many types of businesses, from SaaS startups to app developers to lifestyle brands, now operate on a subscription-based model. This includes nearly all of today’s most popular enterprise software, such as Salesforce, Slack, and Google Workspace.

4 types of subscription pricing models

There are four main types of pricing models that are popular among B2B and B2C companies, each with its own set of advantages and disadvantages. To maximize recurring revenue, it’s crucial to optimize your subscription pricing model to fit the structure and framework of your business, and the goods or services you sell.  

Although there are also other types of subscription-based pricing models, we will specifically cover the most common ones being used today.

1. Fixed or flat-rate pricing

This model offers subscribers a single price for all the products or services they’re purchasing. Customers typically get access to all features and are charged monthly or annually. A fixed or flat-rate pricing model can be a good fit for companies that offer a product with limited capabilities or features. Companies may find themselves selling to a limited number of customers. Smaller businesses may not be able to afford the flat-rate price and enterprise organizations may find the capabilities and features available do not meet their needs.

Usually, these products offer a clear solution to common pain, making them easier to sell, especially to a single buyer persona. And since there is a fixed rate, pricing is simple and easy to communicate to customers. 

But a fixed pricing model doesn’t work for every company. It may be appropriate for companies that offer a simple and predictable product, but B2B SaaS companies that have feature-rich software will find this type of pricing inefficient. It’s difficult to set a fixed price on SaaS tools due to their complexity of offerings, and the diverse needs of each customer.

2. Tiered pricing

A tiered pricing model provides customers with different package options and features and gives them the flexibility to choose which is best for them. This pricing model is common among SaaS companies that offer software with different levels of service and features. It’s also a popular pricing model choice for e-commerce companies, such as streaming services, apps, and mobile games. This is because it provides both benefits to buyers and sellers. The buyer is able to choose from different pricing packages that are available and sales teams can offer buyers additional package options that increase up-sell opportunities. 

Tiered pricing models are commonly used because they are scalable, as upsell opportunities become easily achievable. This pricing model has the ability to reach a larger target market because it provides different solutions and prices for customers to pick from, based on their unique needs and preferences. Lastly, it helps maximize customer lifetime value by enabling customers to upgrade their subscription plan as needed. 

When creating a tiered pricing model, businesses should ensure each package has a clear distinction between features or levels of access. This enables customers to fully understand the differences in pricing and value of the product or service. 

3. Per-user pricing

Many businesses choose to go with a per-user model because it’s simple and easy to scale as their customer base grows. Since it’s based on a number of users, as a company grows, so does its user count – which means they need to upgrade their plan.

For the seller, a per-user approach simplifies revenue forecasting. And owing to its ease of scaling, this model is often used by SaaS companies 

This pricing model does come with some disadvantages, though. Employees frequently share their login information and the end result is lost revenue. And per-user pricing doesn’t necessarily reflect the value of your services or products. Just because the price of 30 users costs a certain amount, does not mean the inherent value of the product should be based on user count. The value should be based on additional sales, user adoption rate, and customer satisfaction levels. 

4. Usage-based model

Usage-based pricing models charge customers based on their usage of a particular product or service – it’s sometimes referred to as a “pay-as-you-go” model. It’s less popular among SaaS companies because it depends solely on usage, which sets a tight ceiling on potential revenue. Usage-based pricing models are primarily used by IT and telecommunication companies.

Usage-based pricing models are considered the most “fair” to customers because they are charged in direct proportion to their usage. But it comes with a number of disadvantages for the seller. Usage-based pricing models are difficult to scale because companies cannot charge customers different prices in relation to the size of their business. Smaller businesses may be paying more and enterprise-sized organizations may be paying less – based on their usage amount – and that leads to lost revenue opportunities. Additionally, revenue prediction and forecasting are more difficult because it can be hard to predict a customer’s future usage. 

What to consider when choosing a subscription pricing model

To ensure you’ve chosen the right pricing model for your business model, you may want to ask yourself a few questions.

1. Who are your current customers

Understanding your customers and their needs will help you determine the right subscription pricing model. Do some customers choose different features and capabilities, or have higher usage rates than others? Are your customers mostly small-business owners? Such customers may have a harder time paying a total amount up front and thus prefer to spread out their payments over time.

When your customers are making purchasing decisions, do they prefer simplicity, or do they like the ability to choose different features or customizations? These types of questions will help you figure out what best suits your customers and may attract them to your subscription. 

2. Does it suit the product you provide?

How complex is your product? Does it have multiple features and capabilities? If so, a tiered pricing model may be the best fit and enable you to charge for different levels of access. When thinking about your product roadmap and revenue model, think about what will help you scale revenue more effectively in the long term.

If your revenue model isn’t aligned with your product growth, then you’ll likely be letting untapped revenue slip through your fingers. You want to choose a pricing model that can grow alongside your product and expand your relationship with each customer – whether through additional features, number of users, or usage. A subscription-based pricing model will increase your recurring revenue, and ultimately, customer lifetime value. 

3. What pricing model does your competition use?

Take a look at established and successful competitors. It’s important to note what works and what doesn’t. By studying the competition, you may also be able to determine where they are leaving gaps in the market – and revenue on the table.

For example: if the competition is geared toward serving large businesses, consider offering a tiered pricing option that will better serve smaller companies that may not have the budget or need as many features. By doing so, you can capture that recurring revenue your competition is blindly leaving on the table. 

4. Is it in alignment with your operating costs?

With subscription-based pricing, you need to keep in mind operating, fixed, and variable costs. Make sure your subscription revenue covers these costs so you can define sales margins and price your products and services accordingly. 

By gaining a better understanding of how you need to price subscriptions in order to be profitable, you can choose a pricing model that optimizes subscription revenue while providing a plan that works well for your customers. 

What’s next? Optimize subscription-based pricing models with subscription management software…

It would be a costly mistake to overlook subscription revenue in today’s subscription-based economy. Choosing the right subscription-based pricing model will enable you to increase recurring revenue, forecast revenue growth accurately, and ensure healthy profit margins.

But managing subscriptions is easier said than done. Although 75% of companies earn most of their revenue from subscriptions, only 24% of them use subscription management software. To optimize your subscription model for success, it’s important to invest in subscription management software that can be used to maximize recurring revenue.

DealHub’s subscription management software allows you to automate the renewal process, identify and recommend up-sell and cross-sell opportunities, and easily generate subscription contracts. DealHub eliminates the need for laborious manual tasks that are often riddled with errors and negatively impact profit margins.

Subscription revenue is a key source of profit, and when properly managed, will enable you to grow recurring revenue and achieve sustainable long-term growth. 

The post 4 Subscription-based Pricing Models and Which is Best For Your Business appeared first on DealHub.

Properly managing subscriptions leads to a whole host of benefits, such as subscriber growth, greater customer retention, increased lifetime value, more expansion opportunities and the ability to forecast revenue more accurately. Failing to manage subscriptions properly leads to different types of revenue leakage, like pricing errors, missed renewal, upsell and cross-sell opportunities. 

Due to our unique position in the SaaS industry and the customers, we cater – for whom subscription business is a key part of their revenue model – we’ve identified the top 10 problems companies face in their subscription management process and how to solve them.

10 common mistakes with subscription management

1. Not using CPQ software

Maximizing revenue from your subscription model requires next-generation CPQ technology. By building accurate and strategic price quotes for subscription plans right from the start, you can ensure smooth renewals and optimize future opportunities for upsells and cross-sells.

Solution: DealHub CPQ helps you streamline your subscription management with a unified sales workflow that automates renewals and recommends timely upsells, cross-sells, and bundle opportunities. Your company can easily standardize the terms and conditions offered to prospects and customers. And with automated discount approval workflows, sales leadership can protect margins while eliminating manual processes that typically slow reps down.

2. Mismanagement of co-term subscriptions

When it comes to pricing, your customers may want to change their subscription plan, products or services at any time, and in general, don’t want any complications or confusion in the billing process. Being able to unify several contracts properly, with the same start and end dates reduces errors and miscalculations. Companies that can’t keep up with customer expectations, as well as their evolving business needs, may find themselves soon abandoned.

Solution: DealHub automatically unifies your billing into a single invoice within your CRM or billing tool. This way, companies can reap all of the benefits of long-term plans and bulk license discounting, without the headache that comes with trying to either charge for everything individually or manually reconcile their payments.

3. No automated billing or invoicing

Businesses that don’t automate their subscription management are at a significant disadvantage. Without automation, sales reps are prone to miss out on additional revenue opportunities, make errors in billing and invoicing, and get caught up in manual processes that waste their valuable time and resources.

Solution: With DealHub, you can seamlessly connect your quoting and subscription processes. Provide every member of your sales team with a single source of information to automate subscription renewals and the terms according to the items the customer bought. Additionally, co-terming and revenue recognition become easily manageable. 

4. Rigid billing frequency

Rigid billing frequency leads to frustrated customers. Customers want a personalized buying experience that is tailored to their needs and preferences – this includes how often they are billed for subscriptions. Flexible payments and billing options help to increase sales, increase your annual contract value, enhance customer loyalty and potentially reach new audiences.  

Solution: Implement flexible billing that uses metrics like consumption, usage, or number of users to generate an invoice. Invest in a billing platform that can support variable billing frequency and amounts.

5. Not offering trials, discounts, or promotions 

Not offering a free trial period, discounts and promotions make it difficult to bring in new business and increase repeat business. Because these are typically most effective when they are time-sensitive, companies that rely on manual processes will be limited by the bandwidth of their employees.

Solution: Automate trials, discounts, and promotions through subscription management software to not only better manage pricing changes, but also track information that will be relevant for future marketing campaigns. 

6. Inconsistent or inaccurate pricing

Complex products and services can be hard to price accurately due to variables such as materials, labor, implementation, support, pricing tiers, and usage. Errors and inaccuracies around can lead to incorrect pricing, which results in lost revenue. This can affect deals large and small and is often part of a larger systemic issue.

Solution: DealHub helps you simplify the quoting process in your subscription business, even for extremely complex deals. Configure fully customizable quotes based on what your customers need. Sales reps can generate error-free quotes with consistent pricing across the entire organization, easily change quantities, and apply discounts without complicated calculations.

7. Missed expansion opportunities 

Research shows that roughly 65% of revenue comes from existing customers. This makes upsells and cross-sells key sources of revenue – and is much more efficient than having to acquire new customers. Without the right technology to recognize and automate these opportunities, you’re likely missing key opportunities to expand revenue. 

Solution: To maximize expansion revenue and improve efficiency, you must build a strategic framework around upsell and cross-sell opportunities. This is achievable by investing in software that helps you automate and propose offerings that proactively address your customers’ needs and reflect your evolving product offerings.

8. Poor payment management

Counting on your team to manually monitor large customer lists, and then having to resolve missed or failed payments is a waste of valuable resources. And it’s impossible at scale. Poor management of payments can also lead to frustrations with the subscription experience that cause customer churn.

Solution: Automation of the subscription billing automates the “dunning” process – or payment collection process – with a workflow for automatically contacting customers who have missed a payment. This way you can configure messages that will automatically be sent to customers. Advanced B2B payment software will reduce a range of manual tasks in the subscription billing process while making payments more efficient, with fewer errors.

9. Not providing language support and multi-currency options

Billing platforms that don’t offer accurate and automatic conversions between currencies, as well as invoice translation, will disappoint potential customers and see their sales suffer. Your customers are global, but your company has a default language and currency. 

“You may be tempted to fix the price in USD, keeping your income flow more stable and your CFO happy,” says an article in Forbes. “However, customers also like stability and may choose your locally sensitive competitor instead”.

Solution: Don’t put yourself at a disadvantage and miss out on great customers by failing to offer support for different geographies. Invest in a billing system that can process quotes and documents in multiple languages and currencies, and adapts to constantly fluctuating exchange rates.

10. Ineffective churn management

A failure to invest in mechanisms that will help you identify at-risk customers to proactively address their issues will result in higher churn rates. Without these mechanisms, it’s difficult to maintain long-term satisfied customers and high retention rates. When subscriptions are about to end, even satisfied customers may be tempted by competing companies who appear to offer something you don’t.

Solution: Purchasing decisions, especially large ones, often happen many months in advance. Make sure you build strong relationships with your customers by investing in tools that help you monitor their status and notify you if a customer hasn’t paid yet, which is an indicator they may be “at risk”. This signals an opportunity for you to check up on them and potentially offer a promotion or discount for renewal.

How can you improve the subscription management process?

In today’s subscription-based economy, missing out on untapped revenue potential due to poor subscription management puts you at a significant disadvantage. 

By effectively managing subscriptions, you can better manage customer relationships and take advantage of opportunities to maximize and optimize subscription revenue. Invest in a top-notch and easy-to-implement CPQ with built-in subscription management, so you can easily solve many of the challenges raised in this article. 

See DealHub subscription management in action

Schedule a demo today!

The post Subscription-based business? Here’s what not to do appeared first on DealHub.

What is subscription revenue?

Subscription revenue is defined as income generated by a business model built on customers paying fees at regular intervals, such as weekly, monthly, or annually. A subscription revenue model generates recurring revenue through long-term relationships with customers.

If you sell a subscription-based service or product, the effective use of subscription models can help sales teams increase revenue, reduce administrative oversight, and efficiently scale their efforts. This is why companies are urgently prioritizing the implementation of sales software solutions that empower sales teams to manage and optimize subscription revenue.

In this article, we explore four common issues faced by sales and customer success teams when it comes to subscription management, and how they can solve them using CPQ and subscription management software.

4 subscription management challenges 

The B2B subscription business model presents its own unique challenges, and the chief among them is subscription management. A lack of strategic framework, substandard enforcement of strategic pricing, inappropriate or rogue discounting, and quoting errors and inaccuracies can create an overflow of mistakes, lost revenue opportunities, and potentially increase customer churn rates. 

These obstacles put your sales teams at a major disadvantage, so properly understanding them and how to effectively solve them is key to the proper management of your subscription-based business.

1. Absence of a strategic framework

With no clear strategy or framework set in place to manage subscriptions, CSMs and Account Managers will find it difficult to maximize recurring revenue and discover that managing subscriptions is a lengthy and error-prone manual process.

The absence of standardized processes also leads to poor decision-making and inconsistencies among sales reps and customers. This can lead to a sub-standard or inconsistent customer experience, lower-than-expected customer retention rates, and damage to your company’s credibility.

To counter that, subscription management provides a strategic framework around pricing, cross-selling, upselling, and bundling. It ensures that CSMs and Account Managers are following best practices and that revenue is being optimized.

2. Poor enforcement of pricing strategy 

Every company has its own pricing strategy made up of subscription pricing rules and guidelines that should be followed by sales reps. Unfortunately, often they are not enforced for a number of reasons, such as a lack of sales training, poor oversight, no sales automation, and human error. 

This can have a huge impact on predictable revenue. Failure to standardize and enforce pricing rules and guidelines means you’re probably missing opportunities to maximize revenue, and leaking revenue elsewhere.

3. Inappropriate discounting decisions

Negotiations with buyers often result in the offering of a discount. In some cases, a rep who’s concerned about hitting quota or about losing a deal may offer customers a discount too early in the sales process and offer a large discount that undercuts the profit margin strategy set forth by leadership. Without proper governance to prevent this kind of behavior, potential revenue is lost, making it difficult to meet goals and accurately forecast revenue.

4. Quoting errors and inaccuracies 

Outdated manual processes lead to wasted time, errors and inaccuracies. For example, when sales reps pull product or price information from a spreadsheet – no matter how accurate – they may perform miscalculations and introduce mistakes. This creates numerous risks for sales leaders, such as missed revenue opportunities, poor discounting decisions, and potential churn. But poorly managed data and inaccurate pricing are easily avoidable.

How DealHub improves subscription management

With DealHub CPQ, you can provide a clear framework for subscription management to improve discount governance, enforce pricing rules and guidelines, and generate accurate and optimal price quotes. Here are four key ways DealHub enables you to do so…

1. Automated renewals

For companies with subscription-based business models, DealHub takes the manual work out of creating renewal opportunities. All deal and customer information are automatically captured and stored securely within the DealHub subscription management system, which is located in your CRM. In addition, you can automate contract terms based on what customers previously ordered. With automated renewals, when the account manager or sales rep is ready, there’s no need for human involvement – thereby reducing errors and inaccuracies. 

2. Discount approval workflows

DealHub CPQ ensures proper discounting through pre-configured discount approval workflows.

Employees offering inappropriate discounts harms margins. Our CPQ automates discount approvals based on limits pre-defined by management. If a sales rep offers a discount beyond that threshold, it will be automatically sent for approval. Once approved or denied, they can quickly send out the quote. This guarantees sales reps are sending quotes that remain within the parameters authorized by leadership.

3. Standardize subscriptions with rule-based logic

With DealHub CPQ, leadership can create a single playbook to standardize subscriptions so the contract terms and pricing products of the deal are set correctly every time. The playbook is fully configurable, so anyone — not just sales ops — can easily make changes to accommodate frequent changes in pricing and product plans. Because everything is up-to-date and accurate, you can easily standardize subscriptions to ensure the right sales choices are being made every single time. 

Instead of having to wade through contracts to ensure terms are favorable, sales reps can use rule-based logic to deliver contract terms that meet leadership expectations. Playbooks can be modified by management quickly and easily to reflect new strategies, making them the dynamic solution to maintaining tactical continuity even as strategy evolves.

“As an administrator you can tailor questions for your sales team to allow for easy proposal generation. Building in product bundle variants, conditional pricing, and approvals lends itself to process standardization, which enables our sales reps to sell faster without hours of training.”

Ryley Giard, Salesforce Solutions Architect

4. Maximize upsell, cross-sell and bundle opportunities

Instead of digging through spreadsheets to manually assemble price quotes, sales reps can have the optimal mix of products automatically generated for them. With the customer’s data and previously ordered items already stored within the system, sales reps can make better selling decisions and maximize upsell, cross-sell, and bundle opportunities. A dynamic sales playbook provides sales reps with guided selling and best practices that enable them to make the best choices for their customers and maximize revenue potential. 

Maximizing subscription revenue stream

If your business uses a subscription revenue model and you want to improve and streamline your subscription management, it’s paramount to implement the right software to help your sales reps succeed and maximize your subscription revenue. 

DealHub CPQ allows sales reps to easily automate renewals, automate discount approval workflows, and standardize subscriptions with a guided selling playbook. In addition, sales reps can maximize upsell, cross-sell and bundle opportunities which increases annual subscriptions and fuels revenue growth. And most importantly, they can provide customers with the best possible buying experience. 

DealHub CPQ has been selected as a Top-50 Sales Product by G2 and recognized as a leader in the CPQ Momentum Grid. We have innovated the next generation of CPQ to empower teams to connect their tech. 

See DealHub’s subscription management in action. Schedule a demo today!

The post 4 Ways to Maximize Your Subscription Revenue appeared first on DealHub.

A few key benefits of a subscription model are the ability to attract customers with a lower up-front cost, regular opportunities for cross-selling and upselling, and the establishment of steadier and more predictable revenue.

However, when subscriptions need to be managed manually, this gives rise to important revenue challenges. Firstly, it puts a burden on sales and customer success teams who must invest time and effort into driving renewals and expansions – all while navigating the technical complexities of doing so. Secondly, it creates ample opportunities for revenue leakage, which we’ll now explore below.

How do renewals contribute to revenue leakage?

To answer that question, you have to drill down into the data to find the sources of revenue leakage. Subscriptions require a lot of data in multiple locations. Inaccurate data slows things down and leads to costly mistakes. The issue is that keeping that data accurate and up-to-date across all data sources (like your CRM) can require a great deal of precision, manpower and time. If done manually, these processes are prone to errors, which lead to precious time being spent on detecting and correcting them which slows down sales and time to revenue.

Constant changes in pricing can be another source of revenue leakage if improperly managed and you’re relying on manual processes. Pricing updates happen more frequently than you might expect, and the more frequent these changes are, the more amplified errors will become. Why do pricing changes happen so frequently? According to Patrick Campbell, Co-Founder and CEO of Profitwell: it’s strategy. In the last RevAmp Podcast episode, Patrick says “You should be changing something about your pricing every single quarter, and this doesn’t mean raising or lowering your price point every month.”

By the time pricing mistakes are caught, it could be too late. Now, you’ll only have two options moving forward: push the deal through and allow revenue to slip through the cracks, or make the corrections slowing the sales process down and wasting everyone’s time. Time spent chasing internal stakeholders leaves your buyers feeling frustrated and increases the chances they go with a competitor.

According to Forrester, product recommendations and upselling are responsible for an average of 10-30% of revenue. That means that a major cost of manual processes and poor subscription management is missing out on potential upsells and cross-sells.

How sales process automation helps prevent revenue loss

CPQ software that incorporates sales playbooks makes it easy to manage an ever-increasing number of subscriptions and renewals. What is a playbook in sales, though? Marketo explains it quite clearly: “Sales playbooks are a means of capturing sales best practices and communicating them to salespeople.”

A playbook helps you achieve three things: simplifying, guiding, and controlling your subscription processes. Each of these steps seamlessly connects your quoting and subscription services, ensures accuracy every step of the way, and minimizes lost revenue.

1. Simplify your subscription management

Lots of considerations go into a subscription-based pricing model. Keeping track of all your renewals, keeping up-to-date with pricing and plan changes, and communicating new offers and upgrades, can all complicate the sales and account-management process.

Don’t wait until an upcoming renewal to start thinking about payment terms and standardizing packages. A subscription management solution consolidates all your renewals into one place and creates easily accessible information for any internal stakeholder. Equip your sales reps with clear, simple guidelines when discussing upcoming renewal with clients and watch their success rate soar. 

2. Guide the subscription process

Sales playbooks guide the sales process and use rule-based logic to empower your sales reps to sell smarter. They will collect the right information and start making the right selling decisions now, and in the future. Without an advanced CPQ, your sales team (both reps and ops) may have to spend hours rebuilding deal structures for each customer whenever changes need to be made. DealHub’s CPQ makes it easy to make ongoing changes for each customer.

3. Take control of your subscriptions

Using workflows to automate different aspects of your subscription management process creates a fast and easy progression through the sales process. For example, you can use workflows to approve discounts outside the approved range. All relevant internal stakeholders get notified of changes, what the changes are, and given the ability to approve (or not) the discount request. Workflows mean no more spending time defining all the relevant changes for each stakeholder, or chasing them down for approvals.

Subscription Management Automation

The subscription economy is booming, with no signs of slowing down. Are you mismanaging those subscriptions and as a result suffering from revenue leakage and missed renewal and expansion opportunities? Or are you using sales process automation to grow recurring revenue and plug subscription revenue leaks?

To learn more about how companies are optimizing their stacks to deal with revenue challenges around subscriptions, download DealHub’s 2021 Benchmark Report for Revenue Leaders.

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