What is subscription management?
Subscription management is the process of handling customer subscriptions, whether of a recurring product or service. This helps businesses optimize their subscription delivery using tech-driven automation and shared data. On the business side, good subscription management helps organizations reduce their customer churn rate, automate billing, and create recurring revenue.
The right solution for subscription management allows organizations to track various subscription models, and B2B sellers use it for cross-selling, upselling, contract renewals, plan updates, and more. It also equips them to help customers manage the details of their subscriptions beyond basic renewals, such as adding more seats to an existing subscription.
Why is subscription management important?
Point yourself in the direction of your dream: a subscription business that hums with predictable growth. That only happens when customers continue to renew, and subscription management makes this possible. It helps you create easier and faster experiences that keep your customers active, from buying the product to using it and paying for it.
With one-time sales, you hit your targets by acquiring new customers. But in a recurring-revenue business — such as those that run on subscriptions — revenue depends on retaining existing customers who pay on time and renew. In fact, in the most recent State of Sales report, sales leaders named “recurring sales” their top revenue source, followed by cross-selling and upselling. What does this mean? Today’s businesses are seeing most of their revenue growth come from existing customers, not new ones. And that falls right in line with the goal of subscription management: keeping your customers engaged so you achieve top-line subscription growth.
Subscription management example
Imagine this: A customer has to call up a sales rep every time they want to buy a subscription. When they want to make a change request, they have to dial up that rep once again, and the rep calls finance. That’s clunky. It’s clunky behind the scenes, too, as teams wrestle with spreadsheets to update invoices and apply credits manually.
With subscription management, the scenario looks different. The same customer buys and updates their subscription instantly — online. But they have the option to engage with a sales rep to seek extra help when necessary. Updates such as pricing changes are applied to the bill automatically. It’s a string of positive interactions that leads to happy customers and renewals.
There’s a lot that subscription management handles in the background to make this possible — bringing customer data into one place, replacing disconnected tools with one platform for every team, and running automation and AI-powered analytics throughout. What it all comes down to in the end is experience.
Drive growth with subscription model innovations
As innovations to subscription offerings and pricing models continue to evolve, sales teams will need flexible subscription management systems that can be configured with customizations. That allows them to adjust and take advantage of new opportunities. Starting with an adaptable subscription management solution will likely pay dividends in your organization’s adaptability and agility moving forward.
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