5 Subscription Billing Struggles Every Organization Must Solve

Over the last decade, the subscription economy has grown at nearly 5x the rate of the S&P 500 (McKinsey). By the end of 2021, the typical American consumer had more than doubled their pre-pandemic subscriptions, from an average of two to five. And while recent years have brought no small amount of economic tumult, early indicators show that most successful subscription businesses have largely held on to their post-2020 gains.

From startups to big-box retailers, many businesses have recognized opportunities for growth in subscriptions. While some have achieved rapid growth, many others have experienced growing pains in adopting this new model. What separates the success stories from those who stumble?

5 Subscription Billing Pain Points

As competition grows, the customer experience becomes more important than ever. Even the smallest inconvenience can be enough for your subscribers to cancel – or worse, sign up with a competing service.

Some of the most common pain points in subscription billing can be traced to the payments system. Processing recurring payments is a key component of any subscription business. Done correctly, the transaction happens so seamlessly that it’s nearly invisible to your customers. However, any problems can impact the customer experience and jeopardize your subscriber relationships.

Here, we highlight some of the most common recurring billing struggles that can affect any subscription business, and how organizations using Salesforce can leverage leading payment technology to solve them.

Payment Processes are Frustrating for Customers

In a recurring billing model, every billing cycle serves as an opportunity to engage with your subscribers. From setting up recurring payments to automatically charging customers each month, these touchpoints impact your brand value – for better or for worse. If your customers constantly experience hiccups related to payment processes, it can lead to dissatisfaction with your product or service as a whole.

Customers Want Convenient Payment Options

Modern ecommerce runs on a vast and diverse payment ecosystem. In addition to traditional credit cards and online banking, consumers want the option to pay with online wallets, prepaid cards, Buy Now Pay Later (BNPL), and mobile payments. And whatever payment method they choose, your customers want the entire experience to be simple.

You risk losing or alienating potential customers by not offering their preferred payment method. Choosing the right payments app makes it easy to connect your payment gateway directly to Salesforce. Chargent gives you access to over 30 of the most popular payment gateways, ensuring you have plenty of options when it comes to taking recurring payments in Salesforce.

Customers Demand Payment Data Security

Handing customer payment data with the utmost care and caution is table stakes for any online business. Breaches due to improper security protocols or carelessness put you at risk of financial or legal penalties, and critically, loss of customer trust.

Security standards like PCI compliance exist to help you manage that risk. Any online merchant or subscription business accepting credit card data from customers must uphold a series of security protocols to protect sensitive cardholder and authentication data.

Maintaining PCI compliance is essential for avoiding fines, penalties, and even the closure of your merchant accounts. Chargent customers have the advantage of reduced PCI scope, secure data handling, and ongoing management.

Customers Prefer Self-Service Options

Ecommerce has significantly increased the autonomy of online consumers. Customers expect self-service options to update and edit their payment information online, without having to contact customer care – or worse, speak to someone on the phone.

In keeping with consumer demand, Salesforce has evolved their commerce options. Salesforce customers can leverage Chargent with Salesforce Communities and empower their subscribers to update payment information, place new orders, view invoices, and request support and services.

Customers Expect Instant Resolution

Even with the best Salesforce recurring billing system in the world, you will receive the occasional customer complaints and requests for troubleshooting payment issues. In an ideal world, your customer service teams will have enough time on their hands to quickly resolve these.

But we don’t live in a perfect world. Your teams can’t manage everything manually with phone calls, emails, and spreadsheets.

Further complicating matters is the fragmentation of customer data and payment data in multiple silos. This usually happens when organizations have legacy accounting/subscription management software working alongside modern CRM platforms like Salesforce. So even if they had all the time in the world, your teams don’t have ready access to the relevant data.

Chargent solves this issue for our customers with Automated Collections. This add-on automates early-stage collections activities like dunning emails and payment retries, freeing your teams from the grind of manual collections, and empowering them to focus on their most high-touch cases.

Lack of 360-Degree Visibility

In a fast-evolving digital market, organizations using legacy software systems often find it difficult to adapt. With each department using a standalone software system, valuable business data is fragmented across multiple data silos. This reduces visibility and slows down vital processes across the organization.

As part of a wider trend toward increased integration, businesses have expanded their use of Salesforce, from a pure CRM service to a broad enterprise solution with marketing, sales, e-commerce, and service tools.

Having all your data on a single platform comes with several advantages for subscription businesses. Across the board, processes are faster as teams have access to all relevant data on the same platform. Robust reporting tools offer a complete overview of critical information – like the overall health of key subscription metrics.

Chargent gives you even more meaningful insights, integrating critical customer and payments data right in Salesforce. In addition, the Chargent Automated Collections dashboard provides enhanced visibility into accounts that have entered your collections process.

Scaling for Growth

Congratulations! You’ve nailed the right product or service for your target customer and successfully marketed it to the right audience – and your subscription business is growing rapidly! But… explosive growth can lead to customer dissatisfaction if CRM and payment systems are not able to scale appropriately.

It’s a familiar story, and one you’ll see reflected in many negative customer reviews. The quality of a subscription service can dip drastically if your payments platform cannot accommodate an influx of new customers.

As your organization grows, managing recurring payments manually becomes less feasible. Growing your team to handle the increased workload is not practical, or affordable.

Automation is essential for subscription businesses targeting sustainable growth. With Chargent’s recurring billing features, you don’t have to worry about future increases in customers affecting your ability to focus on core processes. It is a fully scalable and powerful solution that is also easy to implement.

Lost Revenue, Failed Payments, and Churn

Churn is public enemy #1 for subscription businesses. When subscribers leave your service, it has a direct impact on the financial health and future of the company.

Some churn is unavoidable. Despite your best efforts, some customers will leave each month simply because they no longer find value in your product or service (voluntary churn).

But another form of churn is more insidious, primarily because it has little connection to customer satisfaction. You can lose happy subscribers to involuntary churn due to failed payments – caused by routine changes like expired credit cards, changes in billing information, etc.

Churn due to failed payments is a major headache for businesses using recurring billing, and can account for up to 48% of your total churn rate. Yet, the reality is that many firms focus almost exclusively on voluntary churn (as it is caused by customer dissatisfaction, which implies a flaw of some sort in the product/service).

The good news here is that this form of churn can be greatly reduced with automation. Using the Chargent Account Updater, you can send automated email reminders to customers, with a Salesforce scheduled job designed to check the card details of all your existing subscribers.

Additionally, the Chargent Automated Collections module is a fully customizable solution for your missed payment headaches. You can send custom email reminders, send payment request links, and automatically retry failed payments, all on a fully customizable schedule.

Consistent Customer Communications

The average monthly churn rate in the subscriptions/SaaS industry is anywhere from 6% to 8%. This figure includes both voluntary and involuntary churn. As your business grows, those numbers add up quickly for your collections teams. Sending emails and placing calls to each customer with a failed payment quickly becomes unmanageable.

An effective dunning process using automated messaging is your best defense against involuntary churn due to failed payments. While your customer may not be in a position to respond to your initial payment requests, clear, consistent communications improve collection rates and increase your chances of maintaining the customer relationship.

Chargent makes it easy to create and refine data-driven automated dunning processes that can be tailored to any payment scenario.

Your ability to successfully bill and take payment from your customers is the lifeblood of your business – and any issues will quickly have a ripple effect across your organization. The five common recurring billing issues highlighted here are interconnected and often stem from a reliance on legacy software and highly manual processes, or a lack of effective payment technology.

For Salesforce users, Chargent offers a seamless recurring billing solution. Built 100% on-platform, Chargent brings advanced payment technology to Salesforce, with no-code and low-code options, as well as pro-code API integrations and developer tools, to solve your organization’s unique subscription challenges.

Read more about recurring billing and automated collections for payments in Salesforce, or more information about how we can improve your recurring billing process, contact our Salesforce payments specialists today.