August Subscription Digest

While August saw the Olympic Torch lit and extinguished in Rio, we continued our exploration of what it takes to succeed in growing recurring revenues while also mitigating risk and reducing costs. This month, we wrote about fraud prevention, the complexity of subscriptions, and the hidden costs of subscription billing. Our August Digest examines Uber’s debut of time-based, flat-rate subscriptions, the customer journey, the benefits of security standards and a new sales tax bill in the U.S. Congress.

Subscription Billing

Uber pilots subscription pricing to lift loyalty | The San Diego Union-Tribune
There are lots of ways to slice and dice subscription pricing and billing. As Craig noted in our video on subscription billing last week, it was only a matter of time before Uber disrupted their own business model by looking at alternative ways to generate recurring revenue. Uber traditionally used on-demand, usage-based billing to monetize their service, but according to this article from the San Diego Union-Tribune by Jennifer Van Grove, Uber is piloting pricing and billing that is based on a regularly-scheduled flat-rate model. Begin asking yourself if there are any opportunities to provide more value to both your business and customers by experimenting with your pricing and billing models. Disrupting your business model might mean the difference between growth and stagnation.

Customer Experience

From Brand to Buy: Build Everything Around the Customer’s Experience | Advertising Week
To increase recurring revenue, you need to nurture customers through the entire customer journey from attract, engage and acquire to retain and grow. This article from Advertising Week uses an excellent metaphor of a bowl of spaghetti to explain that journey. Your buyers take a long and winding road toward becoming loyal subscribers, and it’s an eternal struggle for marketers to figure out what message results in a mutually beneficial long-term relationship between buyer and seller. That struggle is compounded by trying to figure out where and when to deliver that message. To reduce costs and the burden on your IT team, it’s necessary to create a network of connected data sources including your CRM, email marketing tool, payment platform and subscription engine.

Once your infrastructure is aligned, your job is to focus on what your customers need and what value you can provide. That value isn’t just about the user experience in the product. It’s about convenience at every stage of the journey. As the article says, it’s more than likely you don’t have the resources to approach each and every customer individually. That means you have to use your resources wisely.

Segment your customer database to support different needs at different times. You have free trial users, super users who need to upgrade plans, casual users who need to renew, and expired or canceled subscribers who you want to win back to your business. Each type of customer needs a different type of message. Your goal should be to increase customer satisfaction by providing a consistent brand experience from subscribe to renew.

Global Compliance

Data privacy and information security

PCI DSS – It Takes a Village | CSO
Do security standards like PCI DSS hinder or facilitate business growth? On the one hand, complying with these standards places a significant burden on merchants who rely on credit card payments for their revenue. On the other hand, without these standards in place, these businesses would be at greater risk from hackers and cybercriminals. This article from CSO makes the latter argument. While acknowledging PCI DSS as a work in progress, the author explains the different ways it protects businesses. The author also shows how PCI SSC works with businesses to reduce the burden of compliance.

Online sales tax

Goodlatte’s Internet Sales Tax Plan Is Better, but Still Falls Short | The Daily Signal
One of the major headaches for online businesses is staying current on constantly changing tax laws. Your tax exposure depends on the location of your business and customers, the type of product or service you provide and other variables. The debate in the U.S. has been going on for a while. Congress has tried several times to pass legislation to address the disadvantage brick-and-mortar retailers have traditionally felt against online businesses, but those bills tended to die along the way. Now it looks like a new bill will be introduced to establish “simple” federal rules for how online businesses calculate, collect and remit sales tax. This is clearly just the beginning of a long debate, but stay tuned for how it impacts your business.

If you are interested in learning more about the connection between subscription billing, customer experience and global compliance, check out our Resources section.