The main source of income for a SaaS startup company is its recurring customers. As long as they continue with their subscriptions, you have steady revenue. Thus, much of the work is managing these regular customers’ subscriptions.
But if you are just starting, that can look like a daunting task. So, let’s look at how you can improve your subscription management strategy through Virtua Solutions’ help.
Understanding SaaS Subscription Management
At its simplest definition, subscription management in SaaS refers to all the work you do during the customer lifecycle. That includes tasks like:
- Managing new subscription trials
- Making changes to current subscriptions
- Issuing refunds
The goal is to ensure that customers enjoy your product without worrying about their accounts. That makes it easy for them to focus on using your product.
Why Subscription Management Matters
Since subscription management encompasses all aspects of your SaaS customer cycle, it impacts these areas significantly. Here are some reasons why you would want to take the time to build your management strategy.
More Effective Signup Process
Subscription managemehttps://www.innertrends.com/wp-content/uploads/2019/12/Fast-Signup-vs-Considered-Signup-A-SaaS-Growth-Experiment-1536×804.jpgnt can streamline your signup process. Customers don’t have to go through a tedious process just to start using your software service. It also makes it easier for you to offer and track free trials. Additionally, you can better tweak these free trials to increase their pull on users.
Better Account Management
During the subscription period, users might want to modify their accounts from time to time. A well-thought-out subscription management strategy will make doing this easier. For instance, you can quickly upgrade or downgrade their accounts in a single session. It also makes it easier for your customer support team to send users information about new features or incoming changes in the service.
Easier Cancellation Process
Cancellations are part and parcel of running a SaaS startup business. Thus, you want to make it easy for you and your customers. Subscription management lets users initiate the cancellation process with a simple request. On the other hand, it allows you to learn more about why they canceled their subscription. You can use that knowledge to refine your future customer engagement strategies.
The Types Of SaaS Subscription Models For Your Startup Company
An essential part of effective SaaS subscription management is choosing the best model for your product. That helps you determine early how management should go. The following are the most common models that companies employ.
Free Trials
This one is the model that most users will be familiar with. Customers sign up for a trial run of the product for a specific period. Once the trial period ends, they can choose to upgrade to a paid service.
A great thing about free trials is that they let customers establish a relationship with you without committing to a purchase first. They also get to understand your product more. On the other hand, you can get feedback to tweak your subscription offers.
Freemium Model
In the freemium model, your customers use a basic version of your SaaS product for as long as they want. However, if they want a more feature-rich version, they can sign up for a paid subscription.
This type of subscription model lets you acquire users at a low cost. Additionally, it is a great way to build brand awareness, as people get to explore your product longer. However, you should be more strategic in convincing them to switch to the full version.
Fixed Rate Subscription
In a fixed subscription model, users pay a flat rate to use your service. There are no tiered options available. It is an effective option if your SaaS product is simple or if you opt to sell an all-inclusive package.
Fixed-rate subscriptions work well to give you a predictable income stream. Additionally, they are easy to manage payment-wise, since you only have to deal with a single customer group. With that, you can also make improvements on the product easier.
Pay Per User
This is the format often used by company-oriented SaaS. As the name implies, the price a customer pays depends on the number of users they have enrolled on it. The option is ideal for small businesses since they only have to pay for employees who will use the product.
Usage-Based Pricing
This type is similar to the above, except that customers pay only for the features they intend to use. That gives plenty of customization options for them. On the other hand, it lets you target smaller businesses and create an opportunity for long-term collaboration. But this can make your revenue stream more unpredictable.
Improving The Subscription Management Strategy Of Your Startup Company
Once you have chosen a SaaS model, you need to tweak it to fit the business environment. For that, you need to strategize on how the subscription management process is done.
Develop A Scalable Subscription Billing Process For Your Startup Company
One of the trickiest aspects of SaaS subscription management is dealing with payments. That is especially the case with services that have customer tiers. Failed payments, in particular, are hard to track when dealing with these tiers.
For that, you need to devise a scalable billing management process. You can use a billing management software for this. It lets you set the customer tier billing process. You can modify or expand these as needed. Some software even sync unpaid invoices so that they can be processed immediately.
Virtua Solutions can help you here. Our agents will handle billing reviews in the background. Once we spot these billing concerns, we quickly inform your payments processing team. With that, you can be sure that all payments come in.
Balance The Flexibility And Complexity Of Your Subscription Tiers
Providing more subscription options for your customers is a great way to draw more customers. But you need to be aware that adding more tiers also increases the complexity of your SaaS business model.
Thus, consider how many tiers would best suit your business. That is an ongoing process. As your business grows, think about how to manage each new tier you add effectively. On the other hand, you should decide which tiers you can dissolve to reorganize your subscription packages.
We can also help you here. As you expand your offering, you will need additional personnel to manage these new tiers. We expand our team as needed to help you with that matter. This gives the freedom to decide how to best implement new product tiers.
Get The Help Your Startup Company Needs For Managing SaaS Subscribers
Subscription management is continuing work that you need to do right. But with us by your side, your startup company can accomplish the work better. Contact us today and let’s get started in better managing your service.