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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.

Are you running out of cash before your subscriptions take off?   Getting started with a subscription business that is based on product innovations such as software and its surrounding services takes a large investment. Once you launch a subscription model for your target customers, you will need to plan significant sales and marketing investment to bring that subscription offering to market. Developing new subscription offerings or revitalising existing ones requires serious cash up front.   Once your business starts booking in its first subscriptions, clients will be looking for great customer service and continual new offerings or innovations for the services or goods they have subscribed to. Now you must foot the bill to run a customer service team, next to the sales and marketing team, R&D, and innovation teams, and of course we cannot forget the finance department and operations. Launching subscription models is a cash intensive operation.   Five enablers to improve your cash flow:   #1 — Capture all your subscription ARR and expenses Running a strong cash flow starts with collecting data from both billing input as well as expenses. In a subscription model inputs are based on recurring transactions on both revenue and expenses. Cashflow forecasting needs to be based on contract values made billable and paid to suppliers. It is critical to facilitate easy data capture of subscription billing data and expense data for the third party subscriptions you acquire and sync it with your cash flow forecasting. This business capability provides strong data analytical insights in cash flow. #2 — Use AI models to run better cash flow predictions Using the Microsoft Azure platform and Microsoft Dynamics 365 Finance together with bluefort’s LISA you can improve and finetune your cash flow. Intelligent cash flow is a tool within Finance insights that allows you to create accurate and editable cash flow forecasts in Dynamics 365 Finance. By using the cash flow forecast capability, you can compare forecasted cash flows with actual cash flows to improve forecasting over time. Read more here. #3 — Improve subscription sales using upselling and cross selling tactics Use sharply defined up- and cross selling techniques, such as collecting all customers using subscription product A and upselling surrounding products and services, possibly using offerings including cash back or discounts. Extend renewals to longer periods of time. #4 — Manage direct debits and online payments Just like credit cards, an online payment option—and an ecommerce shop in general—makes shopping and subscribing more convenient for your customers. It can also help you move services more efficiently. Connect your online sales portal or sites with a payment gateway, so you run efficiently, and get cash more promptly. #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.

Is your subscription time-to-quote destroying revenue generation?   Many scale-ups in SaaS and XaaS fall into the trap of not being able to process customer subscription quotes and orders in a rapid paced process. Consequently, customers have to wait, and take actions they shouldn’t need to.   If you still use email communications with your prospects and customers, you’re already on the back foot. Ping-ponging details via emails and meetings or phone calls back and forth is a tedious process that lies at the mercy of your team members. If they for any reason cause delays in follow up, the order flow gets stuck. Not to mention all the manual labour costs that end up as sunk-cost fallacy. Some companies take up to 30 days to process upgrades or subscription changes, resulting in frustrated customers.   3 actions you can take to change the dial:   Subscriptions can be complex to deal with in the back end, especially with subscription changes due to up- or downgrades, or new commercial plan transitions. The following 3 step transformation strategy can turn your process power up. #1 — Orchestrate the back-end process Very often the ball ends up at Finance, who need to clear up uncertainties during renewals, up- or downgrades, and add-on sales. Start with a clear view on your subscription line items, what are you selling and how is pricing set up? Focus on simplification where possible. Use logical subscription product master data with clean commercial models. Then design a process to set up a subscription order flow from first billing, change control on up- and downgrades or up- and cross sales, and ensure a strong data analytical capability is in place. Create a cross-departmental process flow from sales to finance to customer services. Use price strategies such as indexing. #2 — Automate everything using ongoing process innovation methodologies Once the business process flows are transparent, use the right application and technology to automate the lead-to-cash subscription lifecycle. Take out manual steps that are not adding value. #3 — Design a simple and clean customer and employee experience during the full subscription lifecycle With the process flow the experience for both partners, customers and your own internal team should be logical and clear. Involve the right people and ensure they understand how to process information throughout the subscription lifecycle.

Could your subscription business bankrupt you?   Subscription business models continue to rise in popularity, but many companies are struggling to transform these models into a profitable business. The major challenge is the underlying complexity and costs it takes to run effective and customer friendly subscription processes. Understanding your subscription business model and running it in a highly automated fashion is core to preventing bankruptcy and increasing profitability. At the centre of this model lies the complexity around different types of commercial options you can offer. The wider the offering to your customer, the more difficult it becomes to manage and scale your business. When your subscription scales up, the complexity multiplies. Consequently, you need more headcount to run the process, denting your profits. Businesses in this position would assume billing automation is not the simple solution in this scenario. With no two subscriptions exactly alike, there may appear to be no way around performing at least some manual billing work at every billing cycle. However, as more customers open accounts and the subscription business scales, manual billing quickly becomes untenable. At this point manual billing processes can even put a business at a competitive disadvantage. As a result many have had to abandon the subscription model completely. Thankfully, automation is an option. In fact, it’s an imperative.   At Bluefort we concentrate on providing leading solutions for SaaS, XaaS and Retailers. Based on Microsoft Dynamics 365 business apps and technology we provide: Hyper automation of process flows from lead to cash and from procure to pay. Full CRM and ERP use, as our solutions are native to Microsoft Dynamics 365. Complete financial control and transaction management. Data analytics and reporting. We can support you in transforming your subscription automation and business processes.

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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. Click here below to open up my calendar and find the right date and time for us to have a chat.

The subscription economy is experiencing large growth in the retail space. This is due to its focus on customer centricity for products that can be continuously provided, resulting in convenience for customers. Next generation retailers, such as Birchbox, have managed to gain close to a million subscribers due to its easy and accessible offerings. Becoming a subscriber-based retailer is based on the following business capabilities:   1. Suitable product offering Your products must be based on usage- or period-based replacement cycles. In the SaaS industry usage models are key. Providing a pay as you use model with monthly pricing based on for example active users drive a subscription model. In retail, products that require replacement as they are consumed over a period are a must to have a subscription-based offering. In retail these are often based on product categories like food, cosmetics, health products, detergents, or toys.       2. Contract based instead of a one-time order-based offering When your customer signs up they engage under a contract with a duration, not on a one-time order. This means you require to capture duration, delivery commitment and payment per period. The contract usually drives a renewal approach to ensure the customer continues to use the products over time.   3. Customer centricity Customers buy subscription to ensure that they don’t need to think about buying the same thing over and over. Over time the subscription requires to understand the customer behaviour to ensure satisfaction. An example that illustrates customer centricity is to offer a “pause” option, when customer do not require to use the continues delivery or use of products as they might be away from home. So, let’s review the high-level business process of box subscriptions and how the payment element slots into the activities. The process encompasses various process activities. A key aspect for success is to provide customer self service and capabilities to ask questions and providing abilities to change aspects of the subscription process by means of eCommerce or portals. This generates a personal touch and improves loyalty. Check out LISA, fit for loyalty. As shown in the business process model above, the payment is captured as an eCommerce transaction, however accompanied by a delivery schedule that the customer has indicated when setting up the subscription. The customer is not only buying a product, but a delivery schedule service as well. The terms and conditions required you to reflect this to the customer. The payment is a subprocess itself in the overall business process and follows the below activities: Customer provides payment details Payment gateway validates payment details via payment processor Once approved payment is processer charges payment to customer Payment processer transfers payment to bank of the merchant or retailer This process is not different than the usual eCommerce checkout, but in the back-end administration much more is required to settle the payment against the subscription agreement and fulfilment. Let’s check it out. Once the payment clear in step 3 above, a notification is triggered sending a create event to the subscription business application, resulting into a subscription agreement that stores the billing line item and the delivery schedule of the products ordered. Then is automates the billing engine to create the invoice which in turn is send to the customer. The customer payment is recorded as well into a payment journal and settles the invoice so that no outstanding balance remains open in accounts receivable. Now the supply chain process fires up as indicated in the business process diagram above. The delivery schedule triggers timely pick, pack, and ship activities so that the goods are delivered to the customer as agreed in the subscription agreement the customer paid for. LISA delivers a convenient and functionally rich solution for streamlined subscription life cycle management. LISA leverages the standard Microsoft Dynamics 365 product and pricing functionality, working seamlessly into the framework of Dynamics 365 Finance and Supply Chain to provide a tight integration with Sales, Projects and Purchasing.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="1633100221595-10" icon_fontawesome="fa fa-envelope-open-o" tab_id="1633100221596-5"][/tab][tab icon_family="fontawesome" title="Set Meeting" id="1633100221637-7" icon_fontawesome="fa fa-calendar" tab_id="1633100221638-10"]JTNDaWZyYW1lJTIwY2xhc3MlM0QlMjJvdXRsb29rLTM2NS1pZnJhbWUlMjIlMjBzcmMlM0QlMjJodHRwcyUzQSUyRiUyRm91dGxvb2sub2ZmaWNlMzY1LmNvbSUyRm93YSUyRmNhbGVuZGFyJTJGYmx1ZWZvcnQxJTQwYmx1ZWZvcnQuZXUlMkZib29raW5ncyUyRiUyMiUyMHdpZHRoJTNEJTIyMTAwJTI1JTIyJTIwc2Nyb2xsaW5nJTNEJTIyeWVzJTIyJTIwc3R5bGUlM0QlMjJib3JkZXIlM0EwJTIyJTNFJTNDJTJGaWZyYW1lJTNFClick the button below to open up my calendar and find the right date and time for us to have a chat.[/tab][/tabbed_section]