Customers are really buying relationships, not subscriptions
Over the last decade, recurring revenue has emerged as the preferred model for businesses moving beyond transactional commerce. In the past, recurring revenue was largely defined by static subscription plans that kept customers purchasing for longer periods and enabled predictable revenue streams for businesses.
However, many businesses that adopted the subscription model found themselves unable to evolve their product catalog, acquire new customers, and grow the business due to inflexible, resource-heavy billing solutions. Recurring revenue businesses have essentially been stuck in providing a one-size-fits-all approach to their offerings — delivering a small number of plans to all customers via a single, simple monetization model.
A new relationship economy is emerging, and it’s all about creating and growing long-term relationships with customers through personalized offerings, customized for each customer (or distinct customer segments), and presented at the right times throughout the life of the relationship.
What does this shift to a relationship economy mean for your recurring revenue business?
You need an elastic approach to your product offerings, pricing, and billing that Chargify, a leader in the recurring billing space, calls Elastic Billing.
In this new era of personalized customer relationships, your business must have the capability to quickly deliver the right offer, to the right customer, at the right time AND constantly handle changes in customer needs. All while constantly evolving what you offer, who you offer it to, and how much your charge to optimize revenue growth.
Elastic Billing is very attainable for recurring revenue businesses with the right tools in place. It is mission critical that your business’s underlying recurring billing engine provides the flexibility and agility necessary for Elastic Billing.
There are three core components of Elastic Billing:
- Personalized offers for different customer segments. Think of an offer as a combination of product, price, packaging, and promotion. In order to personalize offers for specific customer segments and successfully present those offers at the perfect time, it is essential that your offer management tools are seamlessly integrated with your recurring billing solution. When that integration is present, your business will be able to create and maintain a large portfolio of personalized offers, and do so for a variety of customer segments.
- Empower everyone to act. Your offer management and recurring billing platform should be available for revenue-generating teams, not just back office IT teams. Product and business leaders need a simple interface for easy offer management and billing. Development teams that must execute billing operations require comprehensive and well-documented APIs. Ideally, there should be as little custom billing code to write and maintain as possible. Whether in the back office, corner office, support center, or development, all teams should be empowered to make changes that allow a business to react to the market.
- Complex offers that are simple to manage. Being able to tailor customized offers to granular customer segments creates a massive catalog of products, prices, packages, and promotions to manage over an expanding customer base. Best-in-class recurring billing solutions make that complexity easy to manage, while tracking all of the critical business metrics in the background.
In this relationship economy, smart businesses are thinking of billing like a product, rather than a back-office system. When you view recurring billing through that lens, it’s easy to see how Elastic Billing can accelerate product, enhance the entire customer lifecycle, propel growth, and provide a competitive edge.
All recurring billing systems are not created equal. To learn how Chargify’s Elastic Billing Engine can give your business a competitive edge, check out www.chargify.com or schedule a call with them today.