Gaining an Edge in the New Subscriptions-based World – Why Billing is the Key
Small businesses and start-ups are becoming big fans of the subscription business model. Increasingly, they are either transitioning their businesses from selling products to becoming service providers, or they are simply starting out with a service-based approach from day one. All are attracted by the prospect of securing recurring business from existing customers with a more predictable revenue stream based on subscriptions, and thereby creating a more valuable supplier-customer relationship.
Attracted by the prospect of securing recurring business from existing customers with a more predictable revenue stream.
Unfortunately, for many SMEs, it is not quite so easy to turn vision into reality. Â Most start out with simple business ideas which can be easily replicated. If a copycat competitor comes on the scene, undercuts them on price and develops goods or services at a cheaper location, it becomes much harder to differentiate.
So, if they want to gain real competitive advantage, what small businesses need most of all is a means of rapidly bringing new services to market and monetising them. They want to provide their customers with more service options and add more flexibility around how they price and package services and up-sell and cross-sell new service offerings. And they need to do all this without increasing their overheads.
This is where, despite its flexibility and creativity, a business can get held back by a seemingly straightforward back office process – its billing.
Businesses need a means of rapidly bringing new services to market and monetising them.
A business model based on subscriptions and usage needs to be able to offer variable pricing plans, which means investing in a billing system. However, traditional on-premise billing systems are typically too expensive, or not agile enough, to handle this requirement. On top of this, they often take years to implement, configure and integrate with other applications. In short, on-premise billing is far from the ideal choice for any subscription-based business and definitely an inhibitor for SMEs looking to monetise new services quickly.
Fortunately, help is at hand in the shape of cloud billing solutions which can slash the time taken and the costs incurred in setting up new services, giving SMEs and start-ups the chance to rapidly turn innovative ideas into monetised solutions. Moreover, implementation can be done in a matter of weeks or even days and the business only needs to pay for the application once it’s in commercial use – a key benefit for small businesses in particular.
This approach is far more cost-effective than traditional methods. There’s no need to invest in expensive new hardware or maintenance costs and payment is based on what is used rather than on upfront software licensing or prohibitive implementation fees. Furthermore, software upgrades are made automatically to ensure users keep up-to-date and can make full use of the latest functionality.
No dynamic and resourceful small business should be held back by its billing system. However, it is often these apparently minor obstacles that prove to be sticking points on the road to success. But, once again, the cloud is breaking down the barriers for these companies – and providing a more positive outlook for those needing to rapidly monetise their service offering and capitalise on the subscription revolution.