On the surface, it seems pretty simple. Your customers purchase a subscription to your product or service, and you charge them every month until they cancel. But when you look at the systems that power subscriptions, you soon see that they’re made up of many tools and processes. Often, these are things that you never realized have an impact on your business, like global compliance issues.
But they do. And if you’re not strategically planning to handle these types of issues, they can cause big headaches in the future. So it’s important to mitigate risk where and when you can.
In our latest video, cleverbridge Co-Founder Craig Vodnik further explores the vast world of subscription billing and what it takes to protect your subscription business from an ever-changing regulatory landscape.
So you’re a subscription business. Your customers are able to buy your product and do it on a monthly or annual basis only.
If you have a solution that is limited to just monthly and annual subscriptions, you probably have a lot of other hidden issues that you’re not aware of, such as being able to deal with foreign taxation, understanding how to have great customer experience in international markets, knowing what the privacy rules are on a global basis, and complying with a variety of other international and domestic standards that you may not even be aware of, such as offering your customers a way to cancel without ever interacting with an agent.
What I’m telling you today, you need to know and you need to find a flexible partner and flexible solution that helps your business today and where you want to go in the future.
Let’s first review what we’ve learned about subscriptions in past videos. The first thing to know is that subscription success depends on building long-term customer relationships. You have to think about each stage of the buyer’s journey and create a positive customer experience across each significant interaction. This isn’t just about the look and feel of your website. It’s also about ease of use. That means knowing how each step taken by your customer leads them to where they need to go.
An engaging customer experience includes signing up new users, collecting payment, processing renewals and cancellations. Something that seems as simple as a monthly or annual renewal means all of these parts — the design and function of your site, your marketing emails, the sign-up process, the payment and billing, the renewal and cancellation events — are acting in concert.
Once you understand the importance of building long-term customer relationships, you have to think about growing recurring revenue streams. In a previous video, Craig emphasized that it’s crucial for businesses to disrupt their own business model. Otherwise, your competitors will do it for you.
Next comes the decision to implement new pricing and billing models. Think about the type of solution you need in order to efficiently manage hybrid models with products that combine regularly scheduled billings with variable prices or set prices combined with on-demand billing.
Now, to make the situation just a little bit more difficult than you wish it were, throw taxes (sales, VAT and consumption), data privacy and information security on top of creating a seamless customer experience and implementing complex billing scenarios. Are you starting to see how tricky this gets?
The road to global subscription success is paved with knowledge and understanding. Beyond creating seamless customer experiences and implementing complex billing scenarios, you also have to know what compliance issues you will face on your road to global customers and understand how to mitigate that risk.