How to Increase Subscription Sales

Benefits of a subscription business model

It’s worth noting that, despite the slowdown in general revenue growth among SaaS providers using a subscription billing strategy, growth has persisted — and continues to do so. These businesses achieved an impressive 20.1% compound annual growth rate (CAGR) over the six years leading up to the study cited above. Moreover, there are compelling signs that the current deceleration could give way to renewed acceleration in the near future.

Alongside the earnings potential offered by a subscription model, there are multiple other factors motivating businesses to adopt this approach, such as:

• Stabilized revenue: Subscription models enable more consistent cash flow by collecting payments in advance or through pre-authorized transactions, reducing the procure-to-pay cycle.
• Improved customer insight: Repeated interactions provide valuable data on customer behavior and preferences, allowing businesses to more easily align their offerings with user preferences.
• Reduced churn: Predictable billing and long-term relationships foster customer loyalty and retention.
• Recovered time: The administrative functions tied to subscriptions—notably those associated with sales, marketing, and billing—tend to require less labor and oversight than their more traditional counterparts.

Subscription revenue challenges 

At the same time, corresponding risks should be considered and accounted for when choosing this billing scheme. In particular, you’ll need to overcome obstacles associated with:

• Signup hesitancy: Unlike an isolated purchase, a subscription suggests an ongoing business relationship requiring greater confidence and buy-in from first-time subscribers.
• Setup costs: For most plans, the majority of expenses will be tied to the initial setup, sometimes requiring a few payment cycles to recoup. This means that a sales boom could artificially restrict your capital.
• Global reach: Given that many subscription types are marketed, sold, and even distributed online (e.g., software, media content), these providers must commonly navigate a more complex web of geographically disparate regulatory hurdles tied to data security, international payments, and more.
• Churn management: Since the bulk of your revenue comes from ongoing subscriptions, you’ll need to dedicate a disproportionate number of resources to keeping current customers from canceling. 

10 key strategies for increasing subscription sales to grow your subscription business 

Fortunately, with some thoughtful planning and the right technology, overcoming the financial drag caused by these challenges can be rather straightforward, letting you drive subscription growth. You’ll want to cater your strategies to the unique nature of your business, offerings, customer base, and market. However, typically, these ten practices will serve you well.

1. Innovate early and often

If you want to beat the competition, it’s helpful to offer better products or services than they do. Rather than staying with business as usual, constantly look for opportunities to improve the quality of the solutions you offer, your timeliness, and your cost-benefit. If they can deliver increased value to potential subscribers, you’ll likely win that new business.

You’d be wise to survey current, potential, and even former subscribers regularly. Understanding the business challenges that led them to work with you or not will help you better tailor your offerings to what the market actually desires.

2. Create tiered plans

Only some customers will have the same reasoning or requirements when signing up for your subscriptions. They might only want some of the options you can provide. Or they might need additional support services. They can pick the plan that makes the most sense for them with alternatives available.

Further, when you offer service tiers, you create up-sales and cross-sales opportunities. Typically, it’s easier to convince a customer to go with one of your subscription plans if they have already done so at least once.

3. Offer discounts

If you’re looking for a short-term subscription bump, run a sale. Or set up a price reduction for the first few payment cycles of a new or annual subscription. Fence sitters are much more motivated to act when even a minor discount is offered. Similarly, if you still conduct ad hoc direct sales alongside your subscription plans, consider a subscription pricing model that runs at a lower price point than these individual purchases.

4. Leverage your existing subscribers

Set up a referral program. Hesitant buyers can often be won over by an authentic client reference, particularly if that client can document the received value from your goods or services. And if you incentivize your current customers to act as a sales funnel for your business, they just might take you up on that offer.

5. Simplify the onboarding process

According to a survey of over 400 companies conducted by Balance Payments, Inc., the majority of respondents — around 83% — noted that a smooth payment and checkout experience was their primary consideration when selecting their B2B e-commerce supplier. And 73% indicated they would abandon their purchase entirely if they encountered friction during checkout.

Given this tendency, there’s no value in having a potential customer begin to sign up for one of your subscriptions only to have them abandon it. And if they rage quit due to an overly complicated or counter-intuitive process, it might actually hurt your business and reputation.

6. Let customers try before they buy

If feasible, set up demos for your subscriptions or offer access to them for the first payment cycle at no cost. As previously mentioned, subscriptions are often viewed—at least psychologically—as a larger commitment than an individual sale, so it helps if you can build a level of confidence with the potential buyer.

7. Drive your decisions with data

Properly capturing, documenting, and reporting on your subscription metrics is a critical — but often overlooked — component of any effective sales strategy. After all, how do you know if that new subscription tier, marketing initiative, or service update was a smart move unless you can compare hard numbers before and after this move? Similarly, institute A/B testing wherever possible for any proposed changes.

Some common metrics you should monitor are:

• Monthly recurring revenue (MRR)
• Annual recurring revenue (ARR)
• MRR movement
• Total subscribers
• Churn rate
• Average sale price
• Customer lifetime value
• Net revenue retention

8. Targeted marketing

Having collected all of this data, you should use it for your benefit. Not all potential subscribers have the same business needs, so they are unlikely to respond to the same prompts. But if you combine real-world sales data with a little market research, you can often craft specific messaging, incentives, and service options for each of the unique demographics in your market.

Even better, if you can personalize the message on an individual level, you can establish a unique rapport with that potential customer and increase their confidence that you’ll deliver the same caliber of care for their subscription.

9. Price your plans competitively

If you want your business to keep its doors open, you must profit from any subscription. But if you get too greedy, you can easily sour both potential and current subscribers on working with you. Instead, keep a constant eye on not only the pricing plans of your competitors but also the market and economic factors that are likely to impact your subscriber base.

10. Prioritize retention

Although not technically a new sale, convincing customers to renew their subscription is effectively the same as making one. And given that adding new subscribers is often more expensive than supporting current customers, these ersatz “new sales” are typically more profitable.

How automation can help increase subscription sales 

Unfortunately, all 10 of these strategies — and honestly, pretty much any other ones that will deliver real value — will require a fair amount of labor to be put in place. You might not have the staff to dedicate to such a task, depending on your available resources. However, Invoiced can help automate some of these processes so you can drive increased value and subscription sales seamlessly. 

Not all automation strategies and platforms are equally effective, but our Accounts Receivable Automation solution simplifies subscription management and offers streamlined workflows that automate your subscription billing. The Smart Chasing feature takes care of dunning for you, helping you get paid more quickly and consistently.

At the same time, our platform includes an integrated, self-serve customer payment portal that allows your subscribers to set up AutoPay, manage subscriptions, switch between service tiers, and update payment details independently. Our Advanced Reporting add-on lets you build custom reports using hundreds of object and field types, empowering your staff and key decision-makers to fine-tune performance based on real-world data.

Invoiced: Subscription billing made easy 

Our Accounts Receivable Automation platform is worth exploring. It offers a wide range of features to support your billing efforts — whether subscription-based or otherwise. Designed to simplify invoice management, it handles even the most complex billing processes. We’ve also recently enhanced it, utilizing Flywire’s extensive integration capabilities and global payment support to streamline subscription sales in over 140 currencies worldwide.

Schedule a demo today and see what we can deliver.