So you’ve built a good business and made a name for yourself. You’ve created stable revenue streams, and you’re gearing up to face the looming recession. Now you’re here wondering whether adding automation to your revenue operations — like billing, collections, revenue recognition, and retention — makes that big a difference; strap in.
Yes. Yes, it does.
During economic downturns, businesses that single-mindedly streamline all their decisions and initiatives toward increasing profitability and efficiency are the ones that have successfully survived and thrived. When done strategically and holistically, adding automation is a significant bolster to your organization’s efficiency, a critical enabler for your growth, and a rite of passage to enter the big leagues.
What if you could focus on maximizing your revenue and not worry about the tech debt of your billing system? What if you could target new customer segments and not worry about the operational difficulty of accepting different currencies or complying with multiple international regulations? What if you could experiment with pricing strategies and not feel dread at the thought of executing a price change?
If you’re nodding vigorously at your screen, I’m here to tell you that your outdated systems aren’t just eating up your time. They’re stealing your growth opportunities.
Where do I start?
Today’s businesses are turning towards a mix of one-time purchases, recurring charges, and usage-based billing to tackle subscription fatigue and meet consumers’ demands for flexibility. But this mix can quickly add chaos to your systems and processes. An entanglement of various subscriptions with various billing logic only grows more complex with time and volume, which would require your team — which should be working on strategy and scenario planning — to put in critical man-hours to keep up with your billing.
Enter automation — and with it, adaptability.
A truly adaptive revenue management approach is more than just automated billing and neatly filed invoices. It’s a strategy and set of tools that manage and optimize your cash flow, reconcile your payments, and streamline collections, revenue tracking, and reporting. With an adaptive approach, you’re also automating tax management, payment processing, payment collection, and payment retries. Having the right system and strategy in place frees up your time to experiment with growth segments and pricing models.
Taking your revenue operations to the next level of automation is like switching from mortar and pestle to an actual electric blender. No one ever said they missed the mortar’s hand workout.
Growth with Automation
Here are seven ways that an automated, adaptive approach to revenue management will accelerate your growth.
1. Unlock new revenue streams with multiple product families
Subscription products typically have multiple plans. Now throw in add-ons, coupons, different price points, different currencies, and multiple billing frequencies. Imagine managing numerous product lines with this whole cohort of operations. It’ll make anybody sweat.
Automating billing with a scalable Product Catalog makes managing your product families effortless and significantly reduces the go-to-market time for new product launches, currencies, and billing frequencies.
2. Manage multiple pricing models and execute hassle-free pricing changes
The majority of pricing used today falls into these buckets.
- Flat rate subscription – a set price charged monthly but billed annually.
- Usage-based pricing – a ‘pay-as-you-go’ approach that charges you on the volume consumed.
- Per-unit and one-time pricing – these refer to one-time transactions
- Tiered pricing – gives you different pricing slabs to choose from
When you scale this up for multiple products, each with its pricing model, it can get overwhelming quickly. With a scalable billing infrastructure, you can support multiple pricing models without wasting your precious hours poring over spreadsheets.
Implementing new pricing strategies or experimenting with pricing can decidedly influence your revenue generation, and you deserve to try on a few so you can find your glass slipper. A study found that continual price optimization helps shoot up your growth trajectory in a matter of months. A robust billing infrastructure makes running pricing experiments as easy as trying on a shoe. You can change your pricing model overnight, offer flexible billing periods, and grandfather your existing customers seamlessly.
3. Reach a wider audience by accepting payments globally
Targeting a broader audience means supporting preferred payment methods and payment gateways of the places you cater to. Your billing system needs to process larger transactions in multiple currencies and languages and calculate taxes based on your geographical location. It also needs to take into account compliance requirements.
Global taxes are evolving on a regular basis — but with the right strategy in place, you don’t have to worry about manually making changes every time a regulation evolves. You can simplify tax management with automated and precise tax rate updates and ensures effortless tax filing and reporting. You can also ensure you have custom tax rules for your subscriptions and gives your customers tailored attention.
An automated, adaptive revenue management strategy also allows you to control the access levels of different people working with your recurring revenue systems and helps you adhere to compliance more easily.
4. Stay on top of revenue leakage with dunning management
Did you know that 20-40% of your churn comes from credit card failures, and it’s not even voluntary?
Now imagine having to spot, cross-check, follow up and somehow revive this lost revenue manually, without losing your customer in the process — especially when they may not even know that their card was declined. Hassle, isn’t it?
Maximizing cash flow will be a critical factor for the survival of all businesses in 2023. If someone is trying to pay you, it should be your top priority to reduce all possible friction to ensure that this cash hits your coffers.
Chargebee Receivables automates your entire AR workflow, reducing collection costs and improving the end-user experience. Actionable insights ensure you proactively manage your receivables and a self-help portal provides your customers with a transparent experience, strengthening their trust in your organization.
5. Uncomplicate your revenue recognition
It’s essential to track the money that flows into your account and how much of it is recognized. But revenue recognition can be a complex process for subscription businesses. If your subscribers have the flexibility to change their subscription tenure, pause or cancel subscriptions, and upgrade or downgrade to different plans mid-cycle, then manually deciding how much — and when — revenue can be recognized can be a nightmare for finance teams.
Moreover, accuracy is critical in the revenue recognition process because you can’t report incorrect revenue numbers in your financial statements and reports. Not to mention the ever-evolving global standards that you must stay compliant with.
Automated revenue recognition helps you eliminate complexities, automatically recognize revenue upon fulfillment, accurately forecast revenue, and stay compliant with global standards like ASC 606 and IFRS.
6. Streamline data collection for efficient decision making
Your recurring revenue lifecycle encompasses seemingly unlimited data, including your customers’ confidential and sensitive information, their preferred payment methods, and so on. If you are home-building or handling it all on your own, it would require many tools to manage and process this highly confidential data. In addition, some accounting systems do not understand the logic of subscriptions and hence could miscalculate a considerable portion of your MRR.
Chargebee provides a holistic view by centralizing all the data that underlies your recurring revenue lifecycle and even provides the relationship between the different data points like customer lifetime value, churn, average revenue per customer, etc. Some of the most integral data screaming the direction your company needs to take right away resides quietly in these datasheets.
7. Increase Customer Lifetime Value with personalized retention strategies
With shrinking capital and increasing interest rates, customer acquisition without a retention strategy can be an expensive route to bankruptcy. During a macroeconomic slowdown, focusing on retention can strengthen your relationship with existing customers, protect them from churning, and increase their lifetime value.
With Chargebee Retention, you can test and target personalized content to reduce cancellations. Building a churn deflection funnel can help you understand the reasons why your customers churn. These insights can be used in real time to make relevant, persuasive offers to make them stay.
How can Chargebee elevate your recurring revenue lifecycle?
An automated, adaptive revenue management strategy offers a smooth, error-free experience for your customers while helping you unlock growth opportunities for your business – it’s a win-win.
When trying to survive and thrive in a challenging climate, it’s crucial to look beyond billing automation to a holistic solution that powers your full recurring revenue lifecycle.
That’s why we built Chargebee to offer multiple, modular solutions under one umbrella: recurring billing, receivables, revenue recognition, and retention. Chargebee enables efficient, sustainable growth, better customer acquisition, and increased customer LTV without compromising compliance and operational excellence.
We’ve helped over 4500+ businesses scale their recurring revenue operations across different industries. If you’d like to automate your recurring revenue lifecycle and get started on the journey to adaptive revenue management, get in touch with us, and we’ll take it forward from there.