Subscription-based and usage-based services are becoming the norm, and organizations across different industries need to invest in the right customizable systems for billing, support, and customer management to make sure they’re not left behind.
As the seminal AmEx ad put it: Membership has its privileges. Subscription business models are so embedded in our daily lives, the average consumer doesn’t even notice anymore. TV, movies, music, apps, groceries, cell phone, online magazines — subscription services keep us ticking over. Gone are the days of the big-ticket annual outlays, replaced by a more bearable monthly charge. Who needs ownership when you can get what you want when you need it?
Subscriptions are just as attractive for businesses: Customer inertia means most contracts keep rolling forward, saving them acquisition costs. But customers can easily be lost if organizations don’t have the right systems to support the challenges of the different industries they serve.
In this post, we consider why subscription models are now favored by some top industries and some of the challenges that causes.
Software applications
The old days of on-premise deployment and support, and the arguments about annual renewal charges, have pretty much gone, replaced with Software as a Service (SaaS) delivery. 70% of organizations say most of their apps will be SaaS by 2020. For start-ups pitching for funds, a commitment to SaaS delivery is a prerequisite for most investors, and for established vendors, their annual meetings are peppered with questions about the current and forecast sales growth of their SaaS products, nothing else matters just as much.
Although vendors wouldn’t have it any other way, SaaS delivery isn’t without challenges. Since support is now managed remotely, and with so many users on different apps, an integrated approach is needed. It must be easy for a user to raise and query a ticket, and help desk and support systems need to be underpinned by powerful workflow to help the support technicians: ticket timers, automated escalation and alerting, detailed metrics, and easy access to the customer’s previous interaction so they can place support response in a historical context.
Financial services
You wouldn’t naturally associate a subscription model with Financial Services, but that’s changing. Customers expect digital interactions, even for staid products like bank accounts, and top providers are taking advantage of new fintech products to change their delivery model. Some bank accounts are now offered with an add-on package, such as consumer help lines or retailer discounts, for a monthly fee, and subscription-based mobile banking is already available. There’s no shortage of fintech products (the $42 billion invested in fintech firms in the first half of this year exceeded last year’s total) and we can expect to see more innovations.
One of the biggest challenges firms face is fraud management — US Banks lost $2 billion to fraud in 2016 — and keeping up with criminals gets harder every year, so the system used to support subscription offerings needs to manage fraud and comply with the Payment Card Industry Data Security Standard (PCI DSS).
Healthcare
Subscription models are more flexible than the traditional fee-for-treatment approach. Patients can manage outlays and often get added benefits like same-day or after-hours appointments and shorter wait times, while the healthcare provider attracts patients who might go elsewhere, and can use regular communications to promote preventative care packages.
But maintaining a regular dialogue with patients comes with a warning. Regulations such as the Health Insurance Portability and Accountability Act, stringent oversight from the FDA, and the threat of cyberattack means any system used to store or send patient data needs to be built on strong security principles.
Media and entertainment
The media and entertainment sector covers everything from film through online publishing to music, games, advertising, and beyond. It’s big business: The top 100 media and entertainment companies in the UK alone had a combined revenue of £96 billion in 2017. Household names like Netflix, Spotify, Deezer, and the evolution of massive multi-player online games like World of Warcraft have seen a huge surge in users. Many games were once free-to-play, funded by online advertising, but that tide has turned as advertisers looked elsewhere, and more and more games are now offered through subscription.
Buyers are fickle and liable to move between suppliers, which means the service provider needs a slick approach to sales and on/off boarding. Systems must make it easy to track leads, generate quotes, support electronic customer signatures to confirm a contract, then automatically link to account setup, service provisioning, and the start of the billing cycle.
Telecoms
Media streaming, the enterprise use of VoIP to replace expensive fixed lines, and the ubiquitous smartphone lie behind the stellar growth in converged digital services that’s benefitting Telcos everywhere.
But billing systems that can’t keep up with complex product bundles, or support different usage models, cause churn that’s estimated as being between 5 and 30% for post-paid telco customers. Billing errors — over or undercharging, for example — are one of the main sources of complaints, unsurprising if the billing system struggles to understand the customer’s product holdings or usage.
Hosting services
Hosters must continually improve to beat the competition and satisfy customers who expect not only a great product at a good price but excellent service from quote through buy to billing and support. While traditional hosters might once have offered straightforward storage or website hosting, they’re now just as likely to offer cloud computing, security & compliance services or managed applications to multi-national businesses.
All of which means they’re heavily dependent on complex data center infrastructure, and need to monitor CPU, memory, and hard drive usage to ensure effective service delivery, and respond at short notice to change requests such as new IP addresses or additional ports.
Conclusion
Antiquated billing systems can’t cope with the demands from industry sectors that have to respond fast to changing customer and market expectations. Modern subscription management systems, on the other hand, can scale with a growing business, meet the needs of different sectors, and provide flexible billing based on different types of usage.
Contact Ubersmith today to find out how our subscription management system can help boost your efficiency and customer experience.
