What do you think caused 5.5 million people in Britain to cancel their credit cards last year? If you guessed fraud, you’d be right. Those 5.5 million people comprise a full 12% of the population—one million higher than last year and evidence that cybercrime has gotten worse in that country and people are taking action to protect themselves.

At the highest level, three major hallmarks of a strong subscription model are:

• predictable revenue
• customer loyalty, and
• the ability to harness a wealth of data for valuable subscriber insights

Predictable revenue and customer loyalty are key because, unlike traditional transactional billing models, subscription businesses frequently incur greater expense upfront to acquire subscribers. The payback on that acquisition cost happens over the subscriber’s lifetime. 

The Internet of Things is transforming how we live, work, and play. Beyond the familiar ‘smart’ devices in our homes, such as thermostats and fitness trackers, the Internet of Things (IoT) has applications in a wide-ranging realm. There are devices that can find our lost phones and luggage, monitor our heart rates and blood pressure, tell us when our cars need maintenance, help manage traffic when we drive, and help make our manufacturing sector and our cities more efficient. The web of connected devices that comprise the Internet of Things promises to bring convenience, efficiency, cost savings, peace of mind, improving our lives in any number of ways.

In e-commerce, transactions can fail for any number of reasons, and every time a transaction is declined, the business loses revenue. With subscription businesses, the problem is compounded by the fact that subscription revenue is recurring revenue. This makes effective management of billing and payments especially critical: any time a transaction fails, a customer can churn.

In our previous post in this series, we talked about the difference between cancellation and churn. The post outlined the different actions you can take when a customer cancels to try to prevent them from churning and how Recurly helps to identify these customers.

Because we know you can’t prevent all churn, we want to talk about ways to analyze your subscriber churn rate to surface insights that you can then act upon. In particular:

• Where does your churn rate stand in comparison to your competitors and/or to the market as a whole?
• What are some of the meaningful data points related to churn that provide actionable intelligence?

The subscription model is one of the fastest-growing categories in e-commerce—which should come as no surprise given the many benefits that a recurring revenue business offers. While the model provides benefits, it also has inherent complexity.

Credit cards are an extremely convenient way to pay for online purchases. However, subscription businesses can face challenges in successfully completing recurring payments via credit cards. This is because after the initial payment at signup, various factors can cause the recurring payments to fail. The most effective way to repair the transaction—and thereby “recover” this revenue which would have otherwise been lost—is to employ automated tools and processes.

In the best of circumstances, financial reporting can be a complicated and sometimes difficult task. Accuracy is critical but not always easy to achieve. Subscription-based businesses face added challenges in accurately recognizing revenue. The business may have different billing models with different terms, have numerous customer upgrades and downgrades that need to be accurately calculated, along with many other customer events each month which affect billing. And many high-velocity B2C companies will process a huge volume of transactions throughout the month. All this makes for a complicated daily revenue-recognition process.

The Internet and the digital world have brought immeasurable benefits to the world at large and transformed nearly every aspect of how we live and work. Unfortunately, in tandem with this evolution unscrupulous elements have emerged, intent on hacking into systems and stealing data for any number of nefarious ends. No entity is completely safe from the risk of hackers, viruses, malware and other weapons that attempt to compromise our systems.

Here’s a really useful blog post from our friends at Price Intelligently, titled “How to Turn a SaaS Company Around in 90 Days.” While it’s written with a SaaS audience in mind, the concepts are solidly applicable to nearly any subscription business.