March 7, 2011 | Authored by: Vindicia Team
SaaS Billing Is A Marketing Asset
A series of conversations with a prospect further highlighted the fact that most digital businesses don’t realize the limitations that their current billing and payments infrastructure impose on their core business mission of extending customer lives.
This particular subscription business is presently run entirely on PayPal. In and of itself, the decision seemed fine to the prospect. The business has grown substantially, their PayPal statements reflect that growth, and PayPal provides them with a series of analytics that help them understand the origins of that growth. All great thus far.
But what the company didn’t and couldn’t know from its existing PayPal infrastructure was the answer to the question – “Do you know what percentage of your transactions actually fail so you can determine what your potential revenue might have been?” They had no idea whether customers paid at a 70%, 80%, or 90% success rate. Nor did they have any concept of retry logic to understand how much additional revenue (and longer customer lives) they could generate—information that is absolutely critical when running a subscription business.
They asked whether we could do a sensitivity analysis on how CashBox could increase their customer retention based on hypothetical initial success rates. We went one step further. We actually showed what three CashBox clients did in the month of December 2010, across a spectrum of different transaction success rates. The graphic shows the initial success rates, and then what the three clients were able to do after taking advantage of the various customer retention capabilities, built into CashBox—from our unique retry logic, to integrated support for Account Updater, and the CashBox communications templates.
The key point here is that every digital business can and should improve their retention rates, even if their initial success rates start north of 90%. This is yet another reason why your SaaS billing solution should be considered not just a part of your operational infrastructure, but a marketing asset that can influence your digital future.
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