A Guide to Choosing the Best Subscription Management Software for your SaaS
Feb 24, 2022
As a SaaS company, managing your subscription model efficiently drives your growth. Focusing both on customer retention and customer acquisition is key for your business.
But What is Subscription Management? In a nutshell, it’s managing your customers’ subscriptions and making sure that their experience with your software is a great one. This starts when your customer subscribes to your product and ends when they churn.
Seeing that your users are correctly onboarded, billed, as well as supported throughout their whole experience with you must therefore be a constant priority. Subscription management software helps you do all of this efficiently.
However, we know it can be difficult to choose between all the tools available on the market. Different payment options, automated dunning… Each software offers a unique combination of possibilities, the question is: which one is the right one for your subscription business?
Want some insight on the main software on the market right now? Read on!
What is a Subscription Management Software and What Is It For?
A subscription management software includes features that are specifically designed to manage the subscriptions you offer your clients: from recurring billing to communications, to managing their subscription online.
It usually comes in addition to payment gateways. Sometimes, payment processing is included in the subscription management software, sometimes it is not. Learn more about choosing the best payment processor for your SaaS.
It is nearly impossible for subscription-based businesses to operate without dedicated subscription management software. Not only do they make your customer’s life easier, but they also make managing your business easier - and foster your revenue growth.
Each software has specific functionalities, and we’ll talk about them in detail below.
Some common features are:
general subscription management like the possibility to have add-ons and let your customers upgrade or downgrade their subscription plans.
Why Use a Subscription Software for Your Saas Business?
SaaS businesses have high sales volumes, as well as various contracts and offers which makes subscription management complicated. The add-ons, setup fees, upgrades and downgrades at your customers’ will would make it a nightmare to process manually. The good thing is: you don’t have to.
With a SaaS subscription management tool, you can focus on the big picture and improve your subscription model by looking at your real-time metrics.
So the next question is: how to choose the best subscription management software for your SaaS business?
How to Choose the Best Subscription Management Software?
If you are tempted to build your own in-house tool: don’t. Using a third-party company - who are experts at what they do - is the better answer for many reasons.
For one, it means that someone else manages and maintains the software while you are busy planning for your growth. It also makes expanding easier, if the tool you choose integrates with your future finance tech stack - which we recommend!
All in all, choosing an external subscription management software is the best use of your resources.
1. Identify Your Specific Needs (Present And Future)
The first step of choosing a SaaS subscription management software might seem obvious, but it can get overlooked: identifying your needs.
Take a look at what you currently offer:
What are your pricing plans?
Can your clients manage their subscriptions on their own?
Do you operate mainly on a self-serve basis or do you work with corporate clients?
The answers to those questions will impact your decision. Identify as well your current priorities: have you been noticing an increase in your dunning rates? In that case, you’ll want to choose software that has advanced tools for you to course-correct that problem.
Where you operate will also influence your choice. If you manage different currencies or do business across various geographical zones, you’ll want software that enables you to do so while staying compliant with the local laws.
Last but not least: consider your future needs. Switching costs are high, so you’ll want to make sure that the software you choose today will still be able to support your growth in two years.
2. Translate Your Subscription Needs into Specific Features
It’s time to look for the specific features in your subscription management software that fulfill them.
The following are the important points to keep in mind when it comes to choosing your SaaS subscription software:
Customer Lifecycle Management:
How easily your subscribers can pause or cancel their subscriptions,
Options to implement setup fees and payment plans,
Discounts and coupons management,
Trial periods supported.
Billing Models: which billing frequencies are supported (monthly, quarterly, yearly, biannual…)
Easy to checkout,
Good UX on the customer journey,
Personalizable branded communications/notifications,
Follow the GAAP and/or IFRS,
Local tax compliance,
Recognition of deferred revenues.
Level of data detail.
Keep in mind that the perfect tool doesn’t exist, you'll probably need several solutions to meet all your needs.
Nonetheless, having a good understanding of your needs and your business will help you make the correct choice. Stay focused on your vision while adapting to the features available presently. Bear in mind that new ones are regularly developed!
3. Check Third-Party Integrations
A good finance stack drives your revenue expansion. Choosing a management subscription software that integrates with third-party tools ensures all your operational backend - from CRM to A/R collecting - work seamlessly together.
Open tech ecosystems work because they evolve with you, by adapting to your current and future needs. This flexibility is an asset when it comes to keeping up with fast growth. Simply put, the right SaaS subscription management software for you is one that will integrate with your current tech stack.
Chargebee for instance is a subscription software that integrates with different solutions -like Upflow- and makes it possible to add tools along the way.
4. Consider your marketing approach
Your subscribers are in it for the long run. Month after month, they expect impeccable customer experience in exchange for their loyalty. And it’s up to you to nurture your customer relationship.
You have natural touchpoints throughout your customer lifecycle: first checkout, subscription renewal, upgrade or downgrade confirmation… These communications need to be accurate, personalized, and on-brand with your overall marketing strategy.
Subscription software lets you have different levels of control over your marketing communications and offer marketing features to nurture your customer relationship.
A Review of Subscription Management Software on the Market
Now that we've outlined the important criteria in your decision-making process, let’s have a look at some of the most popular software on the market.
Originally a payment gateway, Stripe expanded with a subscription management feature: Stripe Billing. With its many integrations and powerful API, its’ strength lies in its convenience. It is also very easy to set up and it supports any business, at any stage.
On the downside, since it caters to such a large audience, it lacks some advanced features that SaaS companies specifically need.
A flexible model which can support various subscription model types like usage-based, tiered, etc.
Direct integrations with card networks and banks.
24/7 live customer support.
Intelligent optimizations through machine learning.
Pay-as-you-go: 2,99% + 30cts per transaction
Enterprises: on quotation
Why choose Stripe Billing: Stripe Billing is particularly user-friendly, which can be a big plus when you’re transitioning from one software to another. It’s also a good choice for e-commerce companies.
Chargify is a subscription management software that specializes in B2B SaaS. They offer a centralized interface to manage the whole subscription process, as well as streamlined processes for fast-growing companies and startups.
Flexible billing: personalize your billing workflows at the maximum. From complex processes to simple ones, 1:1 billing offers a more personalized experience and segmented pricing.
Different pricing models are supported, as well as add ons.
Marketing features like targeted promotions and discounts.
Send customized communications at every stage of the customer lifecycle: keep your tone of voice at all times.
Dunning prevention tools: an email before payment, or when a first payment fails.
Pricing: 3-Tiered plans from $599/mo to $3,499/mo with different revenue thresholds and overage %
Why choose Chargify: Chargify is adapted to all business sizes and basically offers endless possibilities of customization and personalization for your billings. Especially useful if you have complex and various payment plans!
Chargebee is an all-in-one platform for your subscription-based SaaS. It integrates with 30+ payment gateways and has a strong API. It is a great solution to grow from an SMB to a larger company.
Subscription management for the entire subscription lifecycle activities: from checkout to reconciliation.
Marketing features: trial periods are supported, as well as discounts, coupons, upsell and cross-sell.
Tailors to localized experience in 150 countries.
Payment gateway and tax compliance add-ons available.
GDPR-ready and SOC-1 and SOC-2 security levels.
Free until the first $100.000 of revenue
2 tiered plan thereafter of $249/mo - $549
Enterprise plan on request
Why choose Chargebee: Chargebee adapts to the largest scope of companies: from startups to upper market companies. If you’re planning to grow quickly and want to choose the right software in the early stages, it could be the right way to go!
Recurly is a billing platform as well as a subscription management software that offers advanced personalization.
Supports complex billing scenarios and flexible subscription plans like usage-based, quantity-based, or hybrid pricing plans.
Numerous languages, currencies, and payment methods available.
Personalize everything: its lightweight API designed by developers, for developers, makes it a powerful tool to create just about any workflow you need.
Dunning features based on machine learning that act as prevention and recovery.
Integrations with payment gateways, CRMs, ERPs, finance tools, data platforms, and more
3 tiered plans, starting at $149/mo + 0,9% fee on revenues
Professional and Elite plans on demand
Why choose Recurly: Recurly offers a lot of flexibility when it comes to setting-up subscriptions and can adapt easily to specific needs. It’s also renowned for its optimized user experience: no hassle involved!
Zuora is a professional solution for companies across many industries, Zuora is considered by some as the leading solution for established businesses that want to switch to a subscription model.
Customizable billing cycles to maximize recurring revenues.
Numerous integrations with other financial software (like Upflow!) and CRMs, ERPs, IT.
Tax, coupon, and trial management all in one place.
Real-time communications with customers through notifications, emails, and text messages
Real-time advanced metrics
Pricing: on demand
Why choose Zuora: Zuora will very much work for you if you are a large-scale enterprise as it offers specific upper market features. It can be considered as the most premium software.
Subscription management software is essential to running a SaaS subscription company. They help reduce churn and increase customer lifetime value.
B2B SaaS specifically need reliable and powerful subscription management software to deal with their offers’ complexities while supporting their fast growth.
The perfect subscription management software is the one that will suit your business the most and offer features that fit right in your current and future needs.
Each software has its’ own USP: some like Zuora are specially adapted for larger companies while others like Chargebee offer features for all types of businesses.
Take into account the design and UX of the software you’ll choose: it’s important your teams enjoy using the tool and don’t have a hard time using it.