Best Subscription-Management Software & Tools

Subscription Management Software Definition: What is subscription software?

The term "subscription management" translates as "subscription management" in English. It primarily involves the alignment and control of all aspects of goods or services that are repeatedly sold on a subscription basis. Common models include weekly, monthly, quarterly, or annual pricing.

Subscription software (sometimes erroneously written as "subscription software") was developed to facilitate corresponding processes. It includes tools for automating typical subscription workflows and managing the entire lifecycle of iterative purchases. Today's software suites for subscription management can typically be used either in the cloud (SaaS subscription management tool) or installed on-premise (on-premise Subscription Service Software).

The software stores customer information, organizes optimal plans for different subscriptions, can be connected to a payment gateway or bring its own payment options, and helps with long-term customer retention - for example through upselling or cross-selling. Subscription management software can typically be integrated into popular e-commerce platforms or catalog/inventory management software.

Why should companies use subscription management software?

Subscription models can actually be applied to many products. In the software industry, the trend has been moving away from classic one-time paid licenses to subscription models for years. Initially, open-source systems were primarily sold as subscriptions, including maintenance services, for financing. Today, most software solutions are available under corresponding interval payments.

In general, many digital products are now set up as subscriptions - from streaming services to e-book providers to online fitness programs. But also in the real world there are opportunities to regularly bring goods (packages) to women or men at fixed prices. Food, office supplies, work tools, cosmetics, clothing or even flowers and toys are just some of the typical subscription sales segments. Products that are always needed and used up or consumed relatively quickly, or worn out, are particularly well suited for subscription sales. As the list shows, in the physical area there are indeed diverse subscription opportunities - both for B2C and B2B companies.

The central question here is: Why is the number of subscription offers increasing? On the one hand, they are increasingly desired by customers. People on average have less and less time. They can save a lot of time and effort by using subscriptions. On the other hand, companies can benefit not only from the sheer need of many (potential) customers for subscriptions.

In addition, they offer them an ideal opportunity to retain buyers in the long term and to encourage further purchases. If a company is already being purchased from and there is accordingly increased trust, the probability is logically much greater that additional or more products will be purchased than in a new purchasing relationship. In principle, subscriptions also promise predictable and continuous revenues.

The potentials are therefore very promising. However, the effort associated with setting up and managing subscriptions is unfortunately not much less. Tracking subscription status, generating invoices, receiving payments, collecting customer data, and so many things in between can be not only very tiring. The larger the customer base, the more difficult it becomes to do all these tasks manually at all. Subscription management software offers comprehensive relief here.

How does subscription management software work?

In order to use subscription software, no special knowledge is usually required. Modern solutions do not require programming skills. They can be connected relatively easily to a shop system and then used. The typical steps in setting up are as follows.

1. Register and enter the master or tariff data with the provider.
2. API connection to the used shop system (detailed documentations and support are the norm here).
3. Connection with specific payment providers (if payment services are not included in the system for subscription billing).
4. Setting up, testing, launching, and long-term management of the subscription offer.

The central functions of a subscription management tool naturally lie in the creation and long-term organization of subscriptions. The following two features or related processes are essential.

• Plan Management: When a company considers a subscription model for goods or services, there are countless ways to structure them. With plan management tools, users can design different options that make the most sense for both customers and the company. Each plan can receive individual contract lengths, prices, scopes of services, and payment options. Subscription software helps those responsible to create and edit these plans in the backend before they are added to the product lists or checkout pages on a website. The plan management functions allow users to update their subscriptions at any time based on strategic decisions. They can also include tools for trial periods and other plan functions.

• Subscription Lifecycle Management: Since customers typically purchase various subscription plans, companies with subscription-based models face a variety of scenarios, which of course are closely tied to their success. The subscription lifecycle of average customers may require changes to payment information, plan upgrades or downgrades, and renewals or cancellations. In this context, the employees entrusted with processing these matters use the subscription management software to access customer account information and make appropriate updates based on this data and customer requests. There is the possibility to upgrade from basic to premium subscriptions after a trial period or a discounted subscription. With functions for managing the subscription lifecycle, employees can ultimately identify sensible opportunities to contact customers directly and identify further sales opportunities.

What are the advantages and disadvantages of subscription management software?

The main advantage of using subscription software is of course the possibility of greatly simplified creation and management of subscription models in all conceivable business contexts. Further key advantages are summarized below.

• Time and Money Saving: Subscription models can theoretically also be organized without specific software. The problem, however, is that such an implementation almost always consumes a lot of time and money. Subscription websites or their features have to be programmed relatively awkwardly and individually and the management of the continuous purchases is potentially very inefficient via Excel lists and scattered databases. The larger the company grows and the larger the number of customers, the more difficult it becomes. The right subscription service software, on the other hand, offers everything needed from a single source - tailored to the individual requirements. This leaves more time and budget for things that cannot be regulated by software.

• Security in handling data: Subscription software or its providers generally have a lot of experience in handling personal data. In the case of really all-round functional subscription models, nothing works without the use of corresponding information - be it for assigning the subscriptions or for optimizing them. Providing for the security and overall DSGVO-compliant use of relevant data is a considerable effort for companies. This can be saved by the expert knowledge of the right provider for subscription software.

• Outstanding Expertise: The typically great expertise of subscription management software providers has already been mentioned in the context of data protection. But also in other areas, these companies have de facto expertise that companies that want to use subscriptions for their purposes cannot acquire without further ado. Why not rely on the professionals? A corresponding cooperation increases the chances of convincing customers with their own subscriptions. However, some providers not only provide their tools, but also personal support, strategy guides, training and/or even services for optimal setup of the system and other work with the software.

• Quick and Flexible Integration: In many companies, an established software architecture for commerce, sales, customer and marketing management already exists. Shop systems, CRM solutions, marketing tools, and other helpers are used. All these programs can either cooperate directly with a subscription management software to optimize their services or benefit from it (for example, through generated data). Taking advantage of these benefits is really no problem with a user-friendly subscription software. It offers suitable API interfaces to all relevant programs. In some cases, very good documentation is provided that eliminates the need for specialists to integrate. The use is therefore versatile, advantageous and easy to implement.

The question that naturally arises after these clear advantages is: Can disadvantages arise at all when using software for subscriptions? If an application precisely appropriate to the company context and the respective requirements is chosen, actually not. However, there are two possible problems that interested parties should always keep in mind.

• Data Protection: Data protection has already been mentioned in the advantages, but it can also fall short for users of a subscription software. In this context, it should be borne in mind that identical data protection guidelines do not apply everywhere in the world. If the decision is made for a US provider, for example, one should be all the more careful to ensure that the DSGVO requirements are really being met. Frequently, even the major providers located outside the EU consider European guidelines. But given the possible negative consequences, a counter-check can't hurt! Companies are normally on the safe side if they opt for subscription system software from Germany or Europe.

• Dependence on Others: Those who rely on a software provider are always somewhat dependent on them. Especially with such important business processes as the administrative work of subscription purchases, those responsible should at least be aware that the possibility of a provider's insolvency for the subscription management cannot be ruled out. A necessary switch to a comparable service is not readily possible. Therefore, a crucial look at the strength or establishment of the respective provider is important when choosing a subscription commerce software.

How do you choose the right subscription management platform?

Not all subscription management software is the same. There are different extensive solutions for various requirements. Finding the right platform for your own purposes is not easy. However, with the following tips, the choice can be greatly simplified. Of course, any application should cover the standard functionalities described above.

• Flexible change of price plans: Subscriptions should meet the wishes and requirements of their target customers as much as possible. Only in this way can they fully play out their strength. Providers of subscriptions must be aware that the conditions of their own customers change. In such a case, the subscription system or the plans generated with it must also be quickly and easily adjusted.

• Discounts, promotions, and vouchers: Often, subscription companies want to offer special deals for their products in the form of discounts, price reductions, or vouchers. This changes the price of a product for a certain period of time and/or a single group of buyers (for example, 25 percent discount for six months). Organizing such features manually is very difficult. The same applies to product bundling as well as quantity or tiered discounts. Consumption-based billing is also a challenge. If you plan such actions, you should make sure that the selected subscription management platform provides comprehensive support.

• Invoice Management: Without a strong, flexible billing system, invoices would have to be written and sent manually. This not only takes a lot of time but also makes the company susceptible to potentially very costly errors. However, with a robust platform for organizing recurring invoices, corresponding to-dos are automated in a matter of seconds.

• Branding: A unified corporate branding is essential for any successful company. It forms the brand and gives companies a certain degree of professional appeal. The recognition value is massively supported. Through branding, customers can more easily identify with a company and its products. All of these properties contribute to boosting profits in the subscription context. Therefore, ideally, no breaks in branding should occur in subscription management either - whether it's online features or on invoices.

• Payment method(-integration): Customers are becoming more and more selective in their purchases and other business transactions. This also applies to the payment methods. If, for example, a certain customer group prefers the classic bank transfer, it is likely that many people from this group will switch to another provider just because of a potentially missing transfer option. Therefore, those interested should pay close attention to whether the solution in question really includes or can integrate the preferred subscription payment providers.

• GDPR conformity: GDPR conformity is of paramount importance for a company that wants to offer its (potential) customers subscriptions. The efficient processing of recurring invoices always requires dealing with specific customer data. If this is not done in accordance with applicable data protection laws, this can have very negative or costly consequences for the subscription company.

• Automated dunning system: In order to record lasting success, a subscription company must predictably collect its recurring invoices. The manual tracking of failed payments, the management of payment repetitions, and/or personal communication with customers about payment problems are time-consuming and prone to error. As a result, sales losses, a sub-optimal customer experience, and in the worst case, customer migration can be very detrimental to the success rate. Subscription commerce software can automate the dunning process based on individual specifications.

What do subscription management systems cost?

Providers of subscription management systems typically offer several bundles or tariffs for different company sizes. The price is often determined by the following criteria:

• Number of customers or billing limit
• Transaction fees
• Contract term
• Payment options
• Range of functions
• Customer service
• Usage and customization rights
• Additional services, such as training

Most of the programs for subscription management are now organized online, i.e., as a SaaS solution. They are largely sold as subscriptions themselves. Customers then pay a certain amount per month or per year according to the core cost factors listed above. An average user company should calculate between 50 and 100 euros monthly for a suitable solution. In addition to standard tariffs, some providers also offer individual enterprise bundles or cheap starter offers. Subscription management software can even be used completely free of charge. However, the billing limits and general functional scopes are then greatly restricted.