So you have a great product. It’s unique, meets your customers’ needs, and there’s a positive buzz around it. Now it’s time to start marketing your business so you can share this fantastic product with the world. But wait... Do you have the kind of money necessary to pay for any marketing costs? If not, how can you still get the word out about your product? It might come as a surprise, but one method many businesses have found success with is the use of subscription management software.
Of course, if you've yet to offer your product or service as part of a subscription package, we may be jumping the gun. However, if you do (or you’re considering implementing a subscription-based model of business) these tools are both affordable and can help manage your subscription offering from beginning to end.
Subscription-based businesses are no longer the realm of corporate titans. Smaller companies can now affordably launch and manage their own subscription services without splashing out on prohibitively expensive software packages, or hiring an expensive consultant. Read on to learn how subscription management software can help reduce your marketing costs, grow your business, and encourage brand loyalty all at once.
First Things First — Why Are Marketing Costs So High?
Marketing costs can be high for many reasons. The type of marketing you choose, the industry your product is in, and where your product is located geographically all contribute to the high costs of marketing.
When drawing up a marketing budget you’ve got to consider everything from hiring a marketing consultant, designing marketing materials like flyers and brochures, renting or buying display space, and purchasing online advertisements. To make matters worse, even if you decide to do everything yourself, expenses can quickly add up, and If you outsource some of your marketing efforts, the costs can soon skyrocket.
To paint a broad picture, small businesses spend around 20% of their revenue on marketing. High costs are one of the many reasons why many small businesses struggle to break away from their humble beginnings to find real success. And, like it or not, marketing is a continuous, never-ending process — a kind of business ouroboros, where every inspirational marketing breakthrough must be ever grander (and effective) than the last idea to grace the drawing board. It’s a costly game, but it’s also a crucial one if you’re aiming to grow your business, expand into new territories, and, ultimately, win people over.
What Is Subscription Management Software And Why Does It Matter?
It may sound rather obvious, but subscription management software (or SMS, for short) helps your business to manage its customers’ subscription plans. An SMS will aid your company in creating, managing, and monitoring subscriptions across various channels; for example, through your website, email marketing campaigns, and billing systems.
When dealing with subscriptions, you’ll need to deal with automatic renewals, changes in payment methods, and, unfortunately, cancellations. And SMS will make these inevitable elements relatively simple to navigate. An SMS may also integrate with your other marketing and business tools, enabling you to track, automate, and measure your entire subscription funnel from beginning to end.
To demonstrate our point in a little more detail, let’s examine three examples:
● A customer signs up for your service. Did they sign up for a trial? Are your customer service executives empowered to extend the trial period if your customers are unsure whether to continue using your product after this time? Getting people to sign up for a subscription is just as important as keeping them afterward.
● A customer uses your product or service. When your product is actively used by customers, you’ll need to provide several billing services. Perhaps your customer needs to upgrade or downgrade their subscription. If they decide to do this during the middle of a recurring billing cycle, will this be reflected in your System of Record? At this point, you’ll need to initiate a conversation with your customer to tot up any credits they’re owed, track any ad-hoc charges, apply discounts, or switch them to a different plan. Management of subscriptions requires time and effort, but SMS can help to reduce this.
● A customer cancels their subscription. The loss of a paying customer is never great news. Still, when you’re operating a subscription-based business model, this is a loss equivalent to the lifetime value (LTV) of that account, rather than a single sale. As a result, the impact of churn is much larger, and so it’s important to empower your business with a system that allows you to handle any request your customer makes, as a bad customer experience can soon turn into a cancellation.
Subscription management and recurring billing are always tightly integrated, with one offering automation and intelligence, and the other flexibility and control. Poor subscription management leads to customers losing trust in the business and refusing to deal with it. Demonstrate that your business processes payments securely, quickly, and seamlessly, and your customers won't have to worry about billing — they can instead focus solely on the value you provide.
Remember — building strong, positive relationships with customers is the key to any recurring business' success. When you have a well-built subscription management system, every sign-up can be the start of something beautiful, rather than a headache for your team.
How Can Subscription Management Software Help To Cut Down Marketing Costs?
Let’s cut to the chase — subscription management software is a one-time investment that will streamline your business processes and help you manage your subscription customers. They’re affordable and can also help you market your products by creating valuable content for your customers. By using a subscription management software provider such as Chargebee.com, you can reach new customers, open up new revenue opportunities, and reduce your marketing costs. Here’s how:
Reducing the cost of managing your subscription services: With an SMS, your (or your staff’s) time won’t be eaten up by the constant demands of your customers. Any micromanagement can be handled by your subscription management software’s standard set of tools, and in many cases, customers should be able to undertake simple tasks (such as changing their method of payment) relatively easily.
Reducing the cost of advertising online: Plenty of subscription services like Graze.com have cleverly used their subscription service as a way of enticing customers into purchasing their snacks in retail stores. How? By advertising to their existing customers using flyers placed in every box they deliver. If you’re a SaaS business, why not offer a referral bonus as an incentive to attract new customers? Promotions are easily created via a subscription management service.
Automating your current marketing efforts: Many SMS providers will integrate with third-party apps like Mailchimp to create targeted campaigns based on user attributes, and send targeted email campaigns based on buying behavior. With a marketing automation tool, you can schedule your emails to go out at certain times, manage your leads, and send them automatic follow-ups based on their actions. This way, you don’t have to spend as much time generating leads and can spend more time closing sales — saving you a lot of time and money in the long run!
Focusing on retention rather than acquisition: It’s a well-known marketing adage that it’s considerably cheaper to retain an existing customer (up to 5 times cheaper, in fact) than to acquire a new one. Since subscription services are all about creating customer loyalty, subscription management software can help to foster longer-term relationships between customer and brand through straightforward subscription management, a simple billing process, and a seamless user experience, enabling you to retain more customers over the long run and save on the cost of acquiring new leads.
Marketing costs can be high, which makes it difficult for many small businesses to grow. Fortunately, subscription management software can help you cut down on marketing costs by streamlining your subscription services. With an SMS tool, you can automate your lead generation efforts, track the number of leads each channel is bringing in, identify which channels are most effective, and create personalized marketing campaigns for each customer. You can also bypass the sales department and sell your products to new customers yourself, which will help you generate leads and close more sales.