Subscriptions are taking over the world of eCommerce. There are subscriptions for all kinds of products, services, and in all industries.
But not all subscriptions are sustainable. For subscriptions to succeed, they need to be managed well. That’s why having an efficient subscription management system is critical.
In this blog, we deep dive into subscription management systems. You’ll learn what it is, why it is important, what are its key components, and which subscription management system is the best for your business.
What is an eCommerce subscription management system?
Managing eCommerce subscriptions involves a lot of tasks. From setting up subscription plans to billing cycles to deliveries, etc. Apart from these, there are other tasks such as sending regular updates to customers, attending to their requests for delivery swap, halt, etc. There’s a ton of small tasks that need to be in sync.
A subscription management system or platform or app, helps businesses perform all these tasks. Ecommerce businesses can set up, manage, and monitor their subscription business model with the help of eCommerce subscription management apps. The system lends efficiency and streamlines subscription management.
Why is a subscription management system important?
Subscriptions are on the rise. In the past year, 54% of consumers have subscribed to eCommerce subscription boxes and 15% have subscribed to service-based subscriptions. As competition in the subscription industry rises, there’s an increasing need for businesses to have comprehensive and smart subscription management systems integrated into their eCommerce businesses. Here are some reasons why you it’s important:
1. Streamline operations
Subscription operations involve many tasks. Streamlining subscription operations is one of the basics of subscription management. Performing every task manually is not possible if you want to scale your business. Having a subscription management system can help you streamline operations efficiently. For instance, you can automate billing and payments, manage the inventory, prevent stock outs or overstocking, have your customer relationship management (CRM) system integrated, collect data, reports and analysis, among other tasks.
2. Enhance customer experience
Customers sign up for subscriptions for convenience, ease of shopping, and to make their life easier. If they find certain aspects difficult, it directly impacts their experience. eCommerce subscription management system helps enhance customer experience. Data collected and analyzed by the system can provide important insights that can be used for personalization. Other factors that impact customer experience are a seamless onboarding experience, flexibility, automated communication, seamless customer support, etc.
A McKinsey study found customers consider experience when signing up for subscriptions.
3. Scalability
Scalability is an essential factor of subscription businesses. And having a management tool supports business growth through easy scalability. For instance, as the number of subscribers increase, your tasks will also multiply. Having a management tool will help handle the increasing volumes and transactions. Moreover, your tool will help adapt to changing business needs with flexible plans.
4. Better customer retention
Even though customers sign up to subscriptions for long-term, there are high chances of churn. Most customers do not fully realize the benefits of subscriptions or find it repetitive and hence choose not to renew their plans. But with a subscription management tool, you can implement proactive strategies to retain customers and reduce churn. For instance, set up dunning management so customers who are about to unsubscribe can be retained by offering real-time incentives and discounts.
8 essential components of an eCommerce subscription management system
Customers sign up for subscriptions for various reasons—for instance, personalized experience (28%), convenience (24%), value for money (23%), among other reasons. If you’re looking for a Shopify subscription management system for your business, here are a few factors you must consider.
1. Automated billing and invoicing
Subscription models have more predictable transactions that occur on predefined dates. A subscription management system makes billing and invoicing related tasks easy to manage. For instance, some features of a subscription billing software are: recurring billing cycle, applying discounts, managing promotional offers, etc. Here are a few ways automated billing and invoicing help:
- Manage recurring billing cycles on time – weekly, monthly, annually
- Reduce errors related to calculation
- Improve cash flow management
- Follow compliance and reporting procedures
- Collect data and analytics reports for insights on subscriber behavior
- Simplify transactions
- Reduce tedious tasks
- Manage payment methods and security
2. Subscription plan management
Businesses that want to create engaging subscription plans need to put in a lot of effort in creating and managing subscription plans. And that’s what management systems help with. Here are a few factors:
- Set up different types of subscription plans to cater to different customer segments
- Customize subscription plans to meet customer preferences
- Set up different pricing models – monthly, quarterly, annual, etc.
- Apply automated discounts and promotional offers to increase revenue
- Enables plan modification, upgradation, downgrade, etc. allowing flexibility to subscribers
- Dunning management and cancellation management to improve retention rate
3. Customer management
Customers commit to subscriptions for a longer duration and hence you must ensure you understand customers’ changing preferences. Customer management is key and you can integrate it within your subscription management system. Here’s how it helps:
- Maintains accurate customer information in one place to enhance customer experience
- Customer segmentation to improve marketing and promotion relevance
- Helps with personalization of deals and offers
- Streamlines regular communication, notifications, and updates with subscribers
- Enables self-service so subscribers can manage their subscriptions via the portal
- Manages customers support, timely responses, ticketing, and quick service
- Tracks and collects customer data based on customer behavior patterns
- Provides data analytics for insights to help with personalization
- Automates customer retention strategies
4. Renewals and retention
Given the competition and changing customer preferences, it is hard to retain subscribers year after year. But there are a few related tasks that you can automate with the help of an intuitive subscription management system and improve retention rates. Here’s how the management system helps:
- Send automated renewal reminders and notifications in a timely manner
- Set up retention strategies, such as offering discounts for renewals, incentives, etc.
- Predict cancellations and offer incentives to retain customers
- Manage churn by assessing reasons for cancellation and provide real-time solutions to retain subscribers
- Set up dunning management throughout customer touchpoints
- The features of subscription billing software include automated renewal prompts, reminders, etc.
5. Analytics and reporting
Subscription businesses have multiple aspects that need to be monitored and tracked. With proper report generation and analytics, businesses can gain valuable insights to help optimize their subscription business. Here’s how a subscription management system helps with analytics and reporting.
- Monitor and track metrics such as monthly revenue, churn rate, average order value, customer lifetime value, engagement rate, etc.
- Generate reports on subscription performance, customer behavior, financial health, etc.
- Make data-driven decisions to optimize subscription strategies
- Customer behavior insights to have an understanding of changing customer preference—63% of people expect brands to use their purchase history to provide personalized experience
- Financial reporting such as revenue, profit, expenses, losses, etc.
- Predictive analytics to identify patterns so businesses can proactively take the necessary actions
6. Integrations
You may require additional functions and features outside of your subscriptions app. Hence, subscription management systems must integrate with third-party applications and tools that can help support and enhance your subscription experience. Here are the different types of integrations and how they help:
- Integration with multiple payment gateways for seamless transaction
- Integration with CRM, ERP, and other business tools for better management of your subscription plans
- API integration for customization of functionalities and workflows
7. Compliance and security
40% of customers do not want their data shared with third parties. Moreover, 75% of customers like to be in control of the data they’ve provided to brands. This makes privacy and security compliance one of the basics of subscription management. Here’s how your subscription management system can help:
- Compliance with industry standards, such as GDPR, PCI DSS, etc.
- Protect customer data and privacy through in-built or integrated security measures
- Update customers about data and privacy compliance and policy changes
8. Customization and flexibility
Today’s customers look for flexibility and customization potential when they look for brands for long-term association. These factors bring confidence and trust as customers know they can change things around if they want to. A good subscription management system should have customization and flexibility capabilities.
- Customized subscription plans based on customer segments and their preferences
- Flexibility in subscription plan pricing to adapt to pricing strategies to increase profits
- Custom billing cycles to cater to customer needs
- Multi-currency and multi-language support for better communication and subscriber ease
- Customizable workflows based on different delivery schedules, etc.
- Flexibility in changing plans, pausing deliveries, changing delivery dates, products, etc.
Why choose Appstle Subscription Management System for Shopify?
There are many Shopify subscription management apps in the market, but Shopify merchants prefer Appstle over other apps. That’s because of the app’s unmatched features and capabilities.
Appstle Subscriptions App keeps the customer (Shopify merchants) at the heart. The app is designed to help merchants set up multiple types of subscription plans based on their industry, products and services, and customer preferences. This gives merchants across industries the flexibility to try, change, and set up multiple types of plans. For instance, subscription box, tiered subscription plans, etc.
Merchants can control their customers’ experience via the dashboard that allows easy management features. Merchants can themselves make the changes, set up automations, personalization features, etc. This gives merchants complete control over their subscription business.
Appstle is highly recommended because of its customer support. Merchants’ queries are answered and issues are resolved within a matter of minutes. Appstle’s technical support staff ensures issues and concerns are addressed efficiently without disrupting businesses.
If you’re looking for a robust subscription management system for your Shopify business, you’re in luck with Appstle Subscriptions.
