Subscription management exists to solve an age-old business problem. The biggest challenge for any new business is the creation of a stable revenue stream. Companies have struggled with this problem for as long as commerce has existed. Demand for a particular product or service is difficult to predict, challenging a stable revenue stream.
Wouldn’t it be wonderful if you had a way to derive a fixed amount of revenue from each of your customers without any unpleasant surprises? It is like a landlord charging rent to their tenants; the rent is always due at the beginning of the month, and the amount is fixed. Well, the subscription model is here to solve your problems.
What is the subscription model, and what is subscription management?
Subscription Model
Under this model, businesses charge their customers a periodic subscription fee (monthly or weekly), and the customers receive products or services periodically. This model is commonly used in newspapers & Magazines but has now spread to other markets, particularly the software and the eCommerce market. As this model grows in popularity online, the need for tools to manage it also increases.
Examples of the subscription model in eCommerce and software
Software used to be a one-off purchase. Back in the ’90s, when Microsoft Windows was gaining popularity, you had to buy a CD with Microsoft Windows Software on it. You had to pay a lump sum to purchase this CD, which was expensive for some. Today, you can buy a Windows subscription service for as low as $20 per month (Source).
The retail giant Amazon is an example of the subscription model spreading to eCommerce. E-commerce sites typically make money by selling customers their products. Amazon does the same. However, it also offers its customers an Amazon Prime membership for a monthly fee. As a prime member, you receive products at a much cheaper rate, and the products are delivered faster to your doorstep. Prime Membership also includes other perks such as exclusive content and free delivery.
Another example is the California-based Dollar Shave Club. The firm sells shaving equipment and bath accessories with a subscription model. You pay them a monthly fee, and they will send you razors, soap bars, etc., at no extra cost whenever you need them.
Subscription Management
Implementing the subscription model comes with its own set of challenges. Here are some of the common issues businesses face with the subscription model:
- Customer Convenience: One of the primary reasons someone opts into a subscription plan is the convenience of not having to manually purchase products/ services again and again. Subscribers are looking for easy to use interface with a simple workflow. Complicated pricing plans with convoluted features drive customers away from subscriptions. Care must be taken to ensure the payment process is also smooth.
- Accidental unsubscribing: There are many instances of customers involuntarily unsubscribing. This can happen for multiple reasons, like a problem with the payment method or a customer forgetting to make a payment. The business needs to approach these customers and help them resubscribe to the service.
- Subscription alteration: You can’t afford any snags when it comes to your subscriptions! Make sure that the process for upgrading or downgrading is easy, quick, and seamless. You might want customers who are about to expire on their plan to quickly complete the following payment before time runs out.
- Error-free Automation: Subscription services require automated billing. It is essential that the computerized billing is accurate according to the plans subscribed to by the customer.
These are some of the issues that companies face with the subscription model. Several online platforms can help smoothly implement the subscriptions to your business, be it eCommerce or software as a service.
Top Subscription management solutions
As stated above, the subscription model is being adopted across various industries and regions. As a result, different subscription management solutions cater to different industries. Here is a list of solution providers categorized by sectors and ranked in productivity, followed by some details regarding each provider:
| Name | Base Plan Pricing | Advantage | Disadvantage |
|---|---|---|---|
| Chargify | $599 per month | Customized solutions and features for the SaaS market, including events-based billing | Not suitable for other industries |
| SaaSOptics | No plans; request a quote | Number of features including cross-currency compatibility and financial reporting | Not suitable for other industries |
| Paddle | No plans; request a quote | Easy-to-use interface | no unique features |
| Billsby | $35 per month | Low cost Drop-in account management | Limited features |
| Chargebee | $299 per month | Wide variety of integrations across geographic regions, languages & currencies. Packed with detailed analytics, cross-selling-upselling, and other features | slow customer support team |
| Zuora | No plans; request a quote | Oldest subscription tool, brilliant subscriber experience | Not suitable for smaller businesses, features can be challenging to understand and use |
| Sage Intacct | Free Plan | The financial accounting system, Good at accounts, financial compliance | Limited subscription features and flexibility |
| Recurly | $249 per month | Flexible subscription billing trial subscriptions Upselling & cross-selling | Integrations with accounting software and financial compliance are not perfectly accurate |
SaaS (Software as a Service)
Software as a service refers to companies that have created cloud-based software (usually B2B) to solve one or more business pain points. This is different from the legacy model of the software business. You could download software to your system in the old days, either from a CD or the internet. In the current market, customers pay a subscription fee for the software. They are allowed access to the interface and different features based on their pricing plan.
Here are the top subscription management solutions for the SaaS industry:
Chargify
Base Plan Pricing: $599 per month
Strength: Customised solutions and features for the SaaS market, including events-based billing
Weakness: Not suitable for other industries
This Texas-based company has created a subscription solution exclusively for SaaS businesses. It has many features that help scale SaaS business and flexible billing options, including event-based billing. This gives SaaS businesses the ability to create a custom subscription plan and add charges based on software usage. While Chargify is a leader in the SaaS subscription market, it does not work for other subscription businesses.
Thanks to its flexible billing scheme and transparent pricing, Chargify earns the top spot in our rankings.
In addition to the above, Chargify is about to be merged with the next contender on the list, SaaSOptics to create a new subscription management tool called Maxio. The rebranding process is not yet complete, so Chargify remains our top contender till Maxio is launched.
SaaSOptics
Base Plan Pricing: No plans; request a quote
Strength: Number of features including cross-currency compatibility and financial reporting
Weakness: Lack of billing flexibility
This tool is another firm dedicated to working with SaaS businesses. It focuses on generating accurate financial reports to help manage the client’s business. While it doesn’t have flexible billing as other providers, it makes up for it with quick and detailed analytics and an easy-to-use interface.
SASOptics gets the second spot in our rankings thanks to its cross-regional compatibility. As stated above, it will soon merge with Chargify and rebrand to Maxio.
Paddle
Base Plan Pricing: No plans; request a quote
Strength: Easy-to-use interface
Weakness: No unique features
Paddle is another Subscription tool for SaaS companies. It integrates well with popular accounting software and offers accurate financial data for reporting purposes. An excellent tool to get the job done. It is undoubtedly better than just using stripe or other payment gateways. However, it doesn’t seem to have any additional features or flexibility that other tools provide.
Paddle is a reliable subscription tool, but it earns the number three spot in our rankings due to its lack of flexible features.
Other Industries
The subscription model is not just present in SaaS but has taken over quite a few industries. Some examples are eCommerce, Healthcare, and Education. Here is our list of Subscription tools that work across multiple sectors, including SaaS.
Chargebee
Base Plan Pricing: $299 per month. Free plan available
Strength:
Wide variety of integrations across geographic regions, languages & currencies.
Packed with detailed analytics, cross-selling-upselling, and other features
Weakness: Slow customer support team
Chargebee seems to be the most popular subscription solution. Its strength is its versatility. Not only does it manage subscriptions and recurring billing, but it also boasts a slew of additional features. This includes a wide range of payment and other software integrations. Compatibility across different regions, currencies, and languages. As well as Upselling and scaling abilities. The company serves various industries, including SaaS, eCommerce, e-learning, and video streaming. One of their clients is also a storage space/ warehousing provider. An extensive range of industries served.
Thanks to its versatility and its growing popularity, Chargebee is number one on our list.
Recurly
Base Plan Pricing: $249 per month ($199 per month for the annual plan)
Strength:
Flexible subscription billing
Trial subscriptions
Upselling & cross-selling
Weakness: Integrations with accounting software and financial compliance is not perfectly accurate
Recurly is a rising star in the subscription market. It costs more and is full of features for flexible recurring billing. There are occasional problems with syncing accounts for financial compliance. However, most users swear it is an excellent solution to scaling your subscriber business.
As a subscription management tool, Recurly compares well with Chargebee. However, its occasional technical problems give it the number two spot on our list.
Zuora
Base Plan Pricing: No plans; request a quote
Strength:
Oldest subscription tool,
Brilliant subscriber experience
Weakness:
Not suitable for smaller businesses,
Features can be challenging to understand and use
Zuora is a subscription pioneer. They have been popularising the subscription model since 2006. As such, they seem to have used their first-mover advantage to bag many prominent clients and don’t seem to cater to smaller firms. Features are customized to the client’s requirements.
Zuora is still a handy subscription tool. However, its features are a little outdated. It owns the number three spot on our list.
Billsby
Base Plan Pricing: $35 per month
Strength:
Low cost.
“Drop-in” account management
Weakness: Limited features
Billsby is a low-cost, no-frills tool for smaller businesses. It lacks many features from more pricey providers, but it has the “drop-in check out” and account management features. The drop-in feature allows you to easily integrate a premade checkout and subscription account management interface with your site. The drawback is that the interface is not customizable and will not have your desired features or aesthetic.
Billsby is an easy-to-use, out-of-the-box solution for companies on a budget. It earns the number 4 position on our list.
Sage Intacct
Base Plan Pricing: Free Plan
Strength:
Financial accounting system,
Good at accounts, financial compliance
Weakness: Limited subscription features and flexibility
Strictly speaking, Sage Intacct is not subscription management software. It is an accounting and financial management software that caters to various industries. It also does subscriptions. Since it isn’t dedicated to subscriptions, it has limited flexibility for subscription plans. However, we decided to include it for companies not looking for an exclusive subscription solution.
You see, other subscription management tools focus on subscriptions and need to be integrated with other accounting software for other financial functions. Sage Intacct already does finance with the additional benefit of subscriptions. A valuable option for companies just experimenting with the subscriber market.
Since it is accounting software with basic subscription functionality. Sage Intacct is the number 5 option on our list.
Conclusion
We hope you find the list helpful. No matter what kind of subscription management software you need, we’re confident that there is something for everyone on our list. If there are any questions about which one may work best for your company, please reach out to us, and we’ll be happy to help!