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Are you still struggling with customer churn?   You have created a subscription offering, and you’re running your business and encounter a lot of churn. What’s happening? As Bill Gates once said “Your unhappy customers are the best source of learning”.   The challenge is to keep your subscription offering fresh, resulting in lifetime customers. It is unlikely all your customers stay onboard forever, but in this article, we outline strategies to keep churn to a minimum. Create excitement and interaction and continue the relationship your customers are used to.   #1 — Customer chemistry Customers like to be treated with royal service. Ensuring you offer adequate and prompt service along the customer journey is paramount. Every part of your customer support services needs to be running effectively: from responding to questions and taking calls to delivering product and scheduling services. Welcoming, efficient, and caring are the adjectives to keep in mind; create a list of best practices and train your employees extensively. Use easy to run customer service apps to allow self-services and drive initiative-taking responses to outstanding queries. These aspects will ensure that your customer satisfaction stabilises based on great customer chemistry. #2 — Listen to your employees and customers Loyal customers grow a business faster than sales or marketing. If we never ask for customer feedback, we'll never understand what drives customer satisfaction. If we don't know what drives satisfied customers, it will be impossible to create customer loyalty. The same counts for your employees that collaborate daily with your customers. Developing a feedback loop,and gathering feedback in the moment of need is crucial to drive business improvements and innovation initiatives. Tactically, it is also a rather easy step to take, here are some ways to get going: Use a tool to send out relevant and in-the-moment surveys using NPS style feedback questions. Microsoft Forms is an example of an easy tool to trigger a survey, for example after billing the customer for their subscription. Setup customer meetings in a defined frequency and listen to their input and feedback, document where needed and act promptly on any items pending. Run frequent debriefing or retrospectives with your teams and capture what went well and what did not go well. #3 — Stay in touch with customer teams Every customer interaction is a people business. Knowing your customer’s teams and staying in the loop is a wonderful way to ensure you are on top of your subscription services and how the people at the end perceive your performance. When teams or people dynamics change for the customer, help new people onboard and ensure they see the value of your subscription services. Explain what has been achieved and what is on the roadmap in the next months to come. Create excitement and interaction and continue the relationship your customers are used to. #4 — Be transparent about any shortcomings Your subscription is not perfect. Customers might figure out elements of your subscription service that are not meeting their requirements. No worries, it happens to the best of us. Dealing with shortcomings is part of the job. Here’s a few ways to deal with it: Schedule a meeting addressing the issue(s) with the customer and stakeholders Learn and understand the issues at hand and ask questions to get deep insights into what your customer is expecting from your subscription and service Decide an action plan quickly and stay in communication on every item of the plan Decide if you can resolve the shortcoming or not. In case you cannot overcome it, explain why, and figure out if your service or product is still bringing enough business value for the price paid If your customer perceived the value to be too low to continue, formally close the relationship in a friendly manner.

Do you know how to manage the costs of developing in-house subscriptions?   Are you reselling and purchasing subscriptions? These questions are extremely important to determine your subscription cost of sale and ultimately your profits.   Whether you are in SaaS subscription or running other subscription models, it is common to deal with subscriptions you need to acquire before you can sell yours. Dealing with 3rd party subscriptions means you would need to track your purchase obligations either directly related to your sold subscription, or as part of your own supplier subscription expenses. Managing in-house subscription research and development is a different ballgame. Using internal project costing to capture all related costs, both direct and indirect, is key to understanding your profitability. Yes, selling drives the revenue and ARR stream, but without strong cost control you might end up with very low profitability. The importance of process understanding is to find process activities you can automate and streamline.   Safeguarding your profitability:   Let’s investigate the details that your subscription business runs on to establish profits in light of two core aspects, cost structure and efficiency.   #1 — Understanding your cost structure In most cases, costing your subscription offering and aligning the financial dimensions per cost driver is a key starting point. The main process elements consist of subscription procurement and internal cost for research and development to provide the subscription. Each financial dimension requires cost control. Key cost control drivers often capture expenses related to: 3rd party software or services procurement Internal R&D projects Customer success or support delivery Maintenance and updates Hosting or other services Hardware and/or equipment Subcontracted services Warehousing Sales commissions Marketing Once you establish the business capability to capture and report costs using the financial dimensions that are explained above, you then need to determine your subscription product structure. Each subscription offering needs to be defined as a dimension as well, so that you, next to assigning cost to the above cost elements, assign costs to a subscription product. This can be done as direct cost via e.g. purchase orders, or indirectly, using for example allocation of costs. With the above financial costing structure, you can rely on a clear understanding of costs and their origin as well as how they are assigned to the costs of a subscription item. #2 — Streamline your processes To ensure you are not losing out on profits, you must review your processes and ensure they run simply and smoothly. A great way of recording your processes is mapping the customer journey to your internal touchpoints. See an example below: The importance of process understanding is to find process activities you can automate and streamline. Let’s review a few examples: Customer orders your subscription resulting in a first cycle invoice. In this case, it is most streamlined if your salespeople creates the quotation first and upon signing the agreement click on won, resulting in an active subscription and automatically invoicing the customer for the first term. When a subscription needs to be renewed, your automation should create all subscription renewals for the upcoming week and you just approve the process of sending a renewal invoice, or even better, fully automate the process of sending out renewal invoices. You need to order 3rd party subscriptions to accommodate your sold subscription. Automation should create a purchase order for you, so that you can send them to the supplier automatically. You want to index subscriptions with 3%, offsetting inflation for example. Automation should run a process that uplifts the prices with that index automatically. Provide customers with a self-service portal, so they can order or ask questions themselves. Although automation requires initial CAPEX investment, and perhaps OPEX expenses as well, ROI is proven, helping you to reduce your costs and increasing profitability.

Driving your sales through subscription.   Building a new subscription offering is tough. Selling subscriptions and continued services resulting in ARR is extremely attractive, but what is the enabler to grow? Sales is the key, as it has always been. But selling subscription-based offerings is not the same as selling one-time services or offerings.   Besides all the work you have done to get your offering out there, building a sales and marketing capability is likely to be even more important than the offering itself. So how can you blow your sales through the roof? Attaching the right price model is a crucial step in powering sales.   4 Ways to Accelerate Subscription Sales:   #1 — Build successful channels to your end customers Building and maintaining a strong partner channel is a core activity for all subscription and licence businesses that operate one. The driver for a healthy relationship between your business and your partner channel is to generate successful end-customer relations and revenue. That revenue will create subscription-based commissions for partners and will give you more market reach to end customers. However, maintaining a solid flow of events in the administration of your business does have a myriad of activities to take into account. Let’s have a look at the flow of information. You sign-up new partners with a partner plan providing commission; Your partner drives a sales cycle for your licence or subscriptions to an end-customer; Your partner closes a new deal and re-sells your licences or subscriptions; Your partner upsells additional licences and subscriptions; You change your licence and subscription plans on renewal (indexing or price changes) and need to inform your partners and end-customers; Your partner has an end-customer that stops using the licences or subscriptions. Establishing strong partners, marketplaces or affiliations empower your sales teams to take your subscriptions to the end-customer, driving new revenue streams and success. However, do keep in mind that there is a cost attached to recruit-to-sell with partners. #2 — Develop a simple and effective price model Attaching the right price model is a crucial step in powering sales. Simple and effective models that match with your value proposition will provide transparency to your partners and end-customers, making it easier to buy. Depending on what type of subscription you provide, consider the following capabilities: Support pay-per-use, pay-per-unit, or hybrid models Allow for discount options Support the plan approach (for example bronze/silver/gold). Allow for indexing of prices and discounts on renewal The pricing might be transparent and easy but calculating underlying costs to offer subscriptions is mission critical. Understanding cost and margin must underpin pricing models. #3 — Make your customer additional offers Subscription companies must keep innovating. Lack of innovation will lead to churn, therefore innovation is crucial. This does not need to be a cost centre. If you focus on developing value-added capabilities and services, you can upsell them to existing customers. Here are some examples of innovation you can upsell, extending existing subscription plans: SaaS e-Learning access to your solution and services Extended support options, with live support agent access Additional business process outsourcing capabilities Add-on solutions enriching the present capabilities Training sessions every year There are many more options that will drive your capability to upsell, the key is to monetize your innovation, whilst ensuring customer value. #4 — Introducing AI in Subscription Sales Using artificial intelligence, your sales team can create predictive models that tell you more about your customers' behaviours, market trends, and new sales opportunities. Predictive analytics is an incredibly powerful sales tool that uses historical data, statistical algorithms, and machine learning to anticipate outcomes based on historical patterns. Predictive analytics have proved to be an important tool for sales, not only improving sales estimating but adding insight into structuring sales teams: More accurate sales quotas—Incorporating reasons in addition to sales rep performance makes it possible to create more accurate and more aggressive sales quotas that are still achievable. Optimising sales territories—Whether you are selling by territory or vertical, analytics can help you align sales expertise and resources to deliver optimal results. Realigning sales policies and compensation—Predictive analytics can also point to new selling models, including revenue distribution. For example, Microsoft restructured its sales compensation by rewarding levels of service consumption rather than straight commissions. Revising staffing—Predictive analytics can point to likely changes in staffing demands in the coming quarter or year. Because it takes time to find new sales resources, anticipating demand can guide hiring strategies, providing enough time for hiring and training to optimise sales productivity. Projecting the impact of product changes—New products, releases, features, and pricing models will have a direct impact on sales. Predictive analytics can help uncover the potential impact of product changes and minimise the impact on sales.

Subscription management reporting and KPIs are all important aspects of a successful subscription business. In this blog post, we will explore the most important reports and metrics in more detail. Subscription management reporting is essential for understanding how your subscription business is performing. You need to track key performance indicators (KPIs) such as revenue, customer churn rate (the percentage of customers who cancel their subscription in a given period), average revenue per user (ARPU), etc., to determine whether your business is growing or shrinking and whether you are making money or losing money.Churn can be devastating to a subscription business - it can quickly erode profits and even lead to bankruptcy if not addressed quickly. There are several steps you can take to reduce churn: 1) identify the causes of churn; 2) address the causes; 3) track progress on addressing the causes; 4) repeat as necessary. Implementing these steps should help you keep more subscribers longer and improve your bottom line. Customer acquisition costs (CAC) is the total cost of acquiring a new customer, including marketing and sales expenses. By tracking your CAC over time, you can determine whether it’s increasing or decreasing and identify strategies to reduce it. There are a variety of factors that contribute to CAC, so you’ll need to track several metrics in order to understand it fully. The main components of CAC include: - Cost per lead: The amount spent on leads divided by the number of leads acquired - Cost per sale: The amount spent on sales divided by the number of sales made - Average lifetime value (LTV) of a customer: The average revenue generated from a customer over their lifetime with your company Once you have these figures, you can calculate your overall CAC ratio—the total cost of acquiring customers divided by LTV. This will give you an idea if it’s worth investing in more marketing and sales efforts to acquire new customers. Reducing your CAC ratio means increased profits for your business! Another one of the most important metrics for subscription businesses is Monthly recurring revenue (MRR). It’s a measure of how much money a company will earn in recurring payments each month. There are a few different ways to calculate MRR, but all involve taking the total value of all subscriptions and dividing it by the number of months in the subscription term. This gives you an average monthly payment amount. For example, if your business has 100 customers who each pay $10 per month, your MRR would be $1,000 (100 x $10 = $1,000). MRR is important because it can help you track your growth over time and forecast future earnings. It can also help you identify which subscriptions are most profitable and assess customer loyalty.   To get started with MRR tracking, here are three steps: 1) Identify your subscription types: There are many different types of subscriptions out there—from SaaS products to memberships—so it’s important to know what type of subscriptions you offer. This will help determine which calculation method is best for you. 2) Determine billing frequencies: Once you know what type of subscriptions you offer, determine how often they bill customers (e.g., monthly, quarterly). This will help determine when to run your calculations each month/quarter so that they accurately reflect your current subscriber base and revenue totals. 3) Collect data: The final step is collecting data on current subscribers and past invoices/payments so that you have accurate numbers to work with. Armed with this data, you can start tracking MRR for your business!   Are you interested in finding out more about these crucial KPIs? Would you like to have all this setup while you focus on scaling up your business? Get in touch with us below.

Do you know why customers are churning?   Churn is your customer giving up on their subscription, and hence a mission critical KPI to track. Understanding churn and customers abandoning your subscriptions is top of mind for all CEOs running a SaaS, XaaS or a consumer-based subscription business. When customers bail out of their subscriptions, it is usually based on 3 situations that drive the decision: The customer got a non-fitting subscription and see no value in it (anymore) During the onboarding and usage of the subscription the customer is not confident in your interaction with them (negative engagement) Competitors offer a better deal than you do  In general churn is different when you segment by type of subscription, you cannot always generalise between B2C box subscriptions or memberships and B2B SaaS. However, churn is still based on the perception that a customer does not see a future in receiving your subscription. If your customer is experiencing strong ROI, they are more likely to remain loyal and less likely to lapse.   3 actions you can take to prevent churn:   #1 — Understanding the opinion of the customer using a Net Promoter Score (NPS) To stay close to your customer and not rely solely on your customer services team feedback, a great and simple data point you can introduce is NPS. After you send a subscription invoice or when you collect a payment, trigger an automation to send a survey to the customer you would like to get the feedback from. Ensuring strong data management for customer contacts is of course instrumental. Usually, the average NPS survey response rate is between 10-30%. You could consider sending reminders and making the survey attractive to fill in by rewarding the contact. Once you have collected the data you can measure and validate the feedback to understand customer experiences. The less customer satisfaction, the higher your churn will be. #2 — Follow service or product telemetry and usage Another digital indication that helps prevent churn is monitoring the use of your subscription services. Depending on the services or products you offer, you can apply remote monitoring, IoT connection or simply check deliveries. Based on the use of the subscription services and products, you can benchmark the customer in terms of what you had expected they would use. If they are far under expected use, you might need to dive in and validate reasons of diminished usage. The less your customer scores on the expected versus actual usage, the more likely they will churn. #3 — Apply a ‘customer is king’ approach Ensuring timely renewal and preventing churn are not tied to specific dates. They happen throughout the customer subscription cycle and are affected by the overall customer experience. It is crucial that you carefully track customer behaviour day-to-day, week-to-week. Your customer success platform should pull in information from a variety of sources and analyse this data to produce understandings that guide your customer engagements. To scale your customer success efforts, the platform should include an early-warning system you can customise to alert you to any significant changes in customer health and satisfaction. The most successful way to reduce churn is to stay advised of customer behaviour. If you are informed of any harmful trends early on, you will be in a much better position to proactively connect to your customer. Observing customer success best practices will help reduce your churn rate. Churn occurs when value declines. Keep your focus on delivering real business value and you will have a loyal customer for years.   The churn management strategies outlined above are effective because they increase the value your company brings to your customer. If your customer is experiencing strong ROI, they are more likely to remain loyal and less likely to lapse.

Are you often confused why your delivery team do not deliver exactly what your sales team promised? Does your delivery team have the right information to allow changes in your subscriptions down the line? A seamless integrated experience is needed for your sales team using CRM with your delivery team using your ERP. At bluefort we focus on bringing a seamless experience for your sales and delivery team for subscription lifecycles using Microsoft Dynamics 365 applications and Power Platform applications. Let’s explore how these applications can run a quote-to-order process flow. Look at our product demo below to understand and experience how we bring this seamless experience using LISA Reach and LISA BusinessPro. Quote-to-Order with LISA Reach and LISA BusinessPro LISA Reach is a model driven app using Microsoft Dataverse. The process starts with understanding and defining the different subscription product offerings that you are ready to sell. Once the subscription item master data is in place, commercial elements are defined, such as price units, discount setup and pricing tiers and bundles. Once your commercial setup is completed, you can use Microsoft Dynamics 365 Marketing or other apps to generate leads for your subscription offerings. When new leads are captured the cycle proceeds by starting an opportunity. The opportunity captures the high-level budget, requirements and needs of a lead. Upon further qualification an opportunity in LISA Reach can be detailed into a more precise offer using subscription quotations. Each new customer and customer contact is directly synchronized with Microsoft Dynamics 365 Finance and Supply Chain Management. Once the quote is complete, send it to you prospect or customer with the click of a button. To complete the process, record if the opportunity is won, resulting into a new LISA BusinessPro subscription plan or if lost the cycle ends there. Using Dualwrite Dualwrite is a near synchronous integration capability that is available with Microsoft Dynamics 365 Finance and Supply Chain Management and Microsoft Dataverse to update data in both applications. You can find more details in this document. At bluefort, we applied Microsoft Dataverse to develop the below integration and make processes between sales, customer services, project operations and Finance and Supply Chain seamless. The integration model offers a near real time integrated flow from quote to order and allows a clear segregation of duties between Sales, Operations and Finance users.   Learn more about LISA Reach here.JTNDc3R5bGUlMjB0eXBlJTNEJTIydGV4dCUyRmNzcyUyMiUzRSUwQSUwOS5vdXRsb29rLTM2NS1pZnJhbWUlMjAlN0IlMEElMDklMDloZWlnaHQlM0ElMjAyMDAwcHglM0IlMEElMDklN0QlMEElMEElMDklNDBtZWRpYSUyMHNjcmVlbiUyMGFuZCUyMCUyOG1pbi13aWR0aCUzQTE1OTFweCUyOSUyMCU3QiUwQSUwOSUwOS5vdXRsb29rLTM2NS1pZnJhbWUlMjAlN0IlMEElMDklMDklMDloZWlnaHQlM0ElMjAxNTAwcHglM0IlMEElMDklMDklN0QlMEElMDklN0QlMEElM0MlMkZzdHlsZSUzRQ==[tabbed_section style="minimal_alt" alignment="center" spacing="default" tab_color="Accent-Color" cta_button_style="accent-color" icon_size="24"][tab icon_family="fontawesome" title="Contact Us" id="1660040694580-6" tab_id="1660040694582-8" icon_fontawesome="fa fa-envelope-open-o"][/tab][tab icon_family="fontawesome" title="Set Meeting" id="1660040694645-2" tab_id="1660040694646-7" icon_fontawesome="fa fa-calendar"]JTNDaWZyYW1lJTIwY2xhc3MlM0QlMjJvdXRsb29rLTM2NS1pZnJhbWUlMjIlMjBzcmMlM0QlMjJodHRwcyUzQSUyRiUyRm91dGxvb2sub2ZmaWNlMzY1LmNvbSUyRm93YSUyRmNhbGVuZGFyJTJGYmx1ZWZvcnQxJTQwYmx1ZWZvcnQuZXUlMkZib29raW5ncyUyRiUyMiUyMHdpZHRoJTNEJTIyMTAwJTI1JTIyJTIwc2Nyb2xsaW5nJTNEJTIyeWVzJTIyJTIwc3R5bGUlM0QlMjJib3JkZXIlM0EwJTIyJTNFJTNDJTJGaWZyYW1lJTNF[/tab][/tabbed_section]

Are you losing out on winning easy opportunities?   When offering subscription plans to your customers, many businesses still focus on bringing on new subscriptions, rather than expanding subscriptions for your existing customers. It is mission critical to find a healthy balance between selling net-new customer subscriptions, and generating more recurring revenue from current subscriptions.   It is natural to increase your revenue by winning new deals. As a subscription business you need to be able to keep up your net-new sales, but at the same time it is just as important to serve new add-ons or extensions to your existing subscriptions. As a business outcome you can set up a healthy mix of generating new and “add-on” recurring revenue. Smart companies can increase their subscription sales by an amazing 10 percent to 25 percent or more simply by effectively selling add-ons.   How to drive more subscription add-on revenue:   #1 — Start with the facts To get started with understanding your revenue composition, we recommend tracking your renewal ratio and definition of add-on sales, so that you can build an analytical view of the several types of revenue you are generating. Each subscription line should be linked to a reason code or revenue indicator for data analysis. Examples are new subscription, add-on subscription, downgrade or upgrade. Use reason code-based reporting to be able to segment your revenue in distinct categories. #2 — Innovate surrounding services and products for your core subscriptions As you invest in new subscription offerings, think about the customer’s needs. If you sell software, it would be great to supply access to eLearning portals or supply new reporting add-on packs to increase the value. Creating memberships or partner programs can also drive add-on revenue, for example: customers can opt-in to a membership offering them free support for deliveries, like Amazon Prime did. These new surrounding capabilities extend your core subscription offering and add more recurring revenue to the bottom line. #3 — Use technology to scale upselling capabilities Depending on your subscriber base of customers, B2C or B2B, you can use technology to generate new upselling opportunities. Let’s review a few options: Empowering Sales and Customer success or services users with the option to add on more sales to a quote. This can be achieved by guided selling showcasing which add-on products a customer could buy or showing surrounding service plans (support/maintenance/memberships) and letting the user add those easily to a quote. They won’t miss the opportunity to sell more as the CPQ flow guides them to ask the right up and cross selling questions in the moment of creating a quote and pricing it. Establish a process to generate new opportunities based on existing subscriptions where products or services that could add-on to that plan are prepared as an opportunity, which can then be sent to the customer as a promotion. Run a process that can get all subscription plans expiring in x days (keeping in mind the pre-invoice feature), with a renewal of e.g. 1 year, create an opportunity that quotes a 3 year plan with a discount or cash back option to motivate customer to renew for 3 years instead of 1 (more ARR), once the quote accepts we can turn it into a subscription chain automatically and run it. Smart companies can increase their subscription sales by an amazing 10 percent to 25 percent or more simply by effectively selling add-ons. Add-ons are a win-win. Customers often have an increase in satisfaction with the purchase as well as the increased convenience of one-stop shopping.   Then why don't most subscription businesses not sell add-ons regularly?   Many salespeople intuitively and correctly sense that pushing or even nudging a customer to make a larger purchase sometimes pushes the customer too far out of his comfort zone and they could end up losing the entire sale -- either temporarily or permanently. The gain for the sales team is once a customer has agreed to buy from you, getting him to make an additional add-on sale is far easier and more profitable than finding a new customer.

Are you taking local currency and customer requirements into account in your subscriptions?   When you are planning to bring your subscription business to new countries, new rules of play apply. SaaS and XaaS businesses are built for global growth. Companies like Dropbox and Spotify have shown a huge portion of their customers are global. The same counts for Microsoft and other SaaS companies. Going global means onboarding currency risks, dealing with new languages and regulations, and new customer pricing models.   A common recurring theme in the success that these companies have had, has been a thorough practice of Price Localization. Allowing a customer to pay in their native currency, with a preferred mode of payment, is indeed a big deal. Going international means new rules and regulations to deal with.   Guiding your internal processes and applications to support going global:   #1 — Build a roll out roadmap, do not apply a shotgun approach Pick one country at a time and ensure that there are common elements from one to the next.. For example, there are stronger commonalities between the UK and Ireland, then the UK and Germany. United Kingdom and then go to Ireland, instead of Germany. Language as well as other elements of business align better between certain countries. Nevertheless, it is key to understand any regulation in each country you do business in. For example in California you are not allowed to automatically renew subscriptions. Take each country or region one step at the time, explore all legal, financial and price culture matters alongside a clear business plan. #2 — Understanding different price levels in different countries or regions Significant effort is required to plan and price your subscriptions in a new region or country. Not all countries can afford the same rates and pricing levels. Also, cultural aspects can play into your pricing strategy. Ensure you test and validate your pricing models before assuming a ‘same size fits all’ approach. #3 — Currency is a headache With ever changing exchange rates, frustration can occur for you and your customers. Sharp fluctuations can be good for you, but it can raise subscription costs for your customers, in the worst case resulting in churn. For larger B2B customers, who might be spending tens of thousands of dollars a month, this monthly difference can be huge. From their perspective, this creates a budgeting nightmare. If you have ever bought something online from an international company, you will have seen the impact of foreign currency conversion fees. These exchange rate fees are charged by your bank or payment gateway, and in some cases can be as high as 3%-5%. For large-scale B2B transactions, though, these fees can add up significantly. That Australian customer that is paying you $100K a month? They would be paying as much as $60,000 a year in foreign currency conversion fees, making your subscription offering far less attractive. #4 — Prepare your back-end financials Going international means new rules and regulations to deal with and your backend applications and process must align. Think about items such as: Extending your VAT or Tax declarations Dealing with currency evaluations Setting up new legal entities Deploying new payment gateway and bank accounts Translating financial documents, such as invoices or payment reminders into new languages Adjusting reporting to the new setup, like cash flow per currency These are just a few critical items, per country or region others will apply. Besides ensuring your team and processes are in place, your business applications must have the functionality to cover requirements such as the ones above. #5 — Improve your speed-to-bill One tactic that speeds up cash in is pre-invoicing. Rather than billing on the renewal dates, setup routines to bill 30 or more days before. This will drive an earlier cash arrival improving cash flow.