Managing subscription renewals
Renewal management and customer churn is a key performance area for every subscription business. However, not every subscription business manages this quite the same way. Depending on your market and your subscription (product or service), managing the renewal process and decreasing churn that efficiently could make or break your business model.
The level of complexity in doing this efficiently (automatically “chaining” to the next contract versus manually) tends to depend on the product or service you’re offering on subscription, whether the charges are fixed (or variable) and the duration of the contract (short or long term). The objective is clear:
- Renew effortlessly with little or no manual human intervention
- Analyse your churn and execute appropriate actions to reduce each type
When Dynamics 355 Finance is combined with Bluefort LISA, subscription businesses not only fully automate the financials for each customer (sale, purchase, recognise revenue), but also proactively manage the renewal and churn of each subscription through subscription chains. Let’s look at some industry examples:The consumer subscribes monthly to a box based on personalised preferences; as many of the items in the box change over the period of the subscription, it’s helpful to “chain” various bundles in a sequence for example “Summer line” and “Autumn line”. Based on the customer’s preferences, certain product variants are included in the subscription, whilst other items might be standard. Reasons for churn could include value for money, product quality or decline in payment (unable to recover lost revenue) etc. which can be remedied on business level and using revenue recovery processes.The B2B market can make SaaS particularly tricky to handle. Whilst contract duration might be longer, additional factors such as fluctuating user counts can make transaction processing tedious to deal with. With bundles and products changing over time, SaaS companies also find subscription-chaining helpful in migrating customers from one offering to the next. An important consideration for SaaS is the ability to adjust the subscription on line-level (for example user count) without affecting the rest of the subscription. Reasons for churn could include value for money or lack of customer support. A 365-degree view of the Customer through Customer-Insights and delivering exceptional Customer Service through D365 Customer Service completes the digital feedback loop.Business services or managed services has grown in popularity in recent years as a subscription. Whether you are providing technology-based service offerings, cleaning services, manufacturing or maintenance and repair, many businesses in these industries have packaged offerings that can be tailored to their client, but standard enough to fit their market. Many of these companies in the B2B space deal with fixed terms and manual renewal interventions; it’s important to be able to link the subscription chain correctly based on the next term for example: up-sell; same terms or new offering. Where managed services are included, poor customer service is often a key issue and involuntary churn is a big pain point. Customer-Insights and D365 Customer Service completes the digital feedback loop as well.
Learning, Media and Health & Wellness have similar challenges to the Retail sector and rely on the ability to chain different subscription together based on uniqueness of products or services and customer preferences.When Dynamics 365 Finance is combined with Bluefort LISA, subscription businesses proactively manage the renewal and churn of each subscription through subscription chains. LISA has the flexibility to manage each subscription plan from the top-down and adjust intelligently on line-level. Whether your offering changes or you rely on new contract terms, subscription chains enable you to automate and drive the renewal process, reducing involuntary churn and driving customer service proactively.
In order to ramp-up your subscription business, renewal automation will play a big role in how successful your module will continue to be. When you consider a technology road map for your subscription model, you need to focus on customer billing, the complexities of your subscription and the related financials with your business strategy in mind. Contact us here for a meaningful discussion about supportive technologies that drive subscription success.
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