The Future is Now: SaaS Subscription Billing. Are you ready?

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| Last Updated: June 25, 2015 |

Reading time: 5 minutes

SaaS (Software-as-a-Service) is quickly becoming a standard aspect of doing business in the internet age. Essentially, SaaS is an application hosted by a provider on its servers, and accessed by clients via a secure internet connection.

Tracing its roots to the days of IBM “time sharing” servers – where customers would purchase blocks of time to access IBM’s powerful mainframes – SaaS allows businesses and other organizations to take advantage of powerful applications without having to go through the expense of implementing an in-house solution. And when it comes to businesses that rely on subscriptions, SaaS-powered subscription billing is increasingly a must-have for today’s marketplace.

A Wide Range of Applications

One of the most common applications of this technology is for any business that relies on monthly or annual membership revenue. This can be in the form of a physical location – such as a fitness facility or dance studio – or a website like the New York Times’ popular TimesSelect service. In both cases, subscription billing allows the business to manage its subscriber base in a way that is convenient for the customer and efficient for the business.

Another common implementation is for organizations that depend on recurring donations, such as a charity or political campaign. Before SaaS technology, one-time physical donations had to be solicited in person or over the phone, and the person donating had to actually write out a check, and physically mail or deliver it to the organization. And while organizations did solicit recurring donations, the extra effort required of the person donating made it harder to achieve consistent revenue.

Now, donations can be sent from the person’s bank account or credit card, with specified amounts and intervals automatically. This dramatically enhances an organizations ability to obtain sustainable funding, and frees up precious resources to perform the mission for which the organization exists in the first place, which is to serve its own customers.

Various support services, such as flat-rate IT technical support, also make extensive use of subscription billing. This eliminates the hassle of sending out monthly invoices, and processing of physical payments as they come in (not to mention keeping track of what client was behind or whose check bounced).

And, of course, the providers themselves make use of their own technology, and generally use SaaS-powered subscription billing for their own clientele. The list is extensive, and includes internet and cable television providers, insurance companies, and more. Virtually any business or organization that depends on client revenue coming in at set intervals can use this technology to improve their efficiency and quality of service, and, by extension, their bottom line.

With subscription billing increasing in popularity every year, there are a number of considerations to be aware of as the industry moves forward.

Subscription Billing Integration

Chief among them is the ability of clients to smoothly integrate the subscription billing service into their operations. A quality subscription billing provider will make it easy for the client to customize the look and feel of the billing application to fit in with what they already have going on. This manifests in customizable billing portals that can be directly embedded in the client’s existing website. Ideally, as far as the client’s subscriber base is concerned, the billing portal should seamlessly appear as part of the client’s website.

In addition to the look-and-feel of the portal, it is also important that the actual data collected integrates conveniently with the client’s existing operational structure. In other words, customer information and preferences, payment data, and so forth, should be readily and easily accessible to the client in a format that works for them. If a client has to add a whole new set of procedures – or worse, hire additional staff – to handle the data, the attractiveness of the service takes a big hit to say the least.

Data and System Security

And it is that data that leads us to our second – but no less important – consideration when it comes to subscription billing: security. Any subscription billing service will be handling a mountain of private customer information, including addresses, credit card information, and sometimes even bank account and social security numbers. And with a virtual horde of cybercriminals out there ready to exploit any weakness, it is imperative that providers are equipped with the latest in network and data security, including up-to-date encryption protocols and robust defenses against known hacking techniques.

This not only applies to the actual billing servers themselves, but also to the security of the connection from the customer. Malware is an ever-present hazard, and it can be safely assumed that a certain percentage of a client’s subscribers will be accessing the service from computers that have been compromised in some way, so this must be taken into account when constructing a security strategy.

Reliability is Paramount

In addition to integration and security; reliability must not be overlooked as a fundamental consideration for a quality subscription billing service. There is no shortage of possible interruptions to network connectivity, from power outages to faulty equipment at the internet gateway the server is connected to. While it is impossible to completely avoid every potential cause of interruption, a top-notch subscription billing service will have done due diligence to ensure that there is as much redundancy as is practical.

Alongside unexpected interruptions to network connectivity, planned maintenance cannot be overestimated as a potential cause of undesirable downtime. It is important that the provider has procedures in place to ensure that; if a planned 15-minute server maintenance turns into a more involved overhaul, the billing service is not interrupted.

The key is to avoid any situation where a client risks losing business because their customers are unable to access the service.

As cloud-based business applications become more and more integrated into standard business operations, subscription billing will continue to be a growth industry. Keeping a keen awareness of the popular applications and central considerations of SaaS-powered subscription billing system will allow your business to ride the wave of this highly valuable technology to a larger client base and increased profits.

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