Salesforce subscription management, a solution for the recurring revenue model

[muskanislam25]

Experience shows that it costs more to acquire a new customer than to retain an existing one. A study by OrderGroove tells us that 41% of revenue comes from repeat customers, which are only 8% of the total. Customer retention has become so important that businesses have evolved to offer new models based on recurring relationships. In fact, as early as 2020, Gartner predicted that more than 80% of software vendors will change their business model from traditional licensing and maintenance to subscription.

This subscription model consists of selling products, services or content to the same customer base on a systematic basis and with periodic payments, usually monthly.
In other words, the subscription business model converts traditional customers into regular subscribers.

However, retaining a customer is no easy task. To do so, you need to focus on creating seamless, engaging, and of course memorable experiences that increase customer loyalty. Needless to say, in subscription models, customer retention becomes even more important, as revenue depends on it. Subscribers expect consistency, personalization, speed, and accuracy. Your business needs to be able to provide it.

For this scenario, Salesforce CRM also has a competitive solution that will make managing your company easier. Let's see what Subscription Management is.

What is Salesforce Subscription Management?
Salesforce Subscription Management is a solution that, through cambodia whatsapp lead technology-driven automation and shared data, optimizes subscription delivery. It also allows you to automate sales, billing, and collection processes for unified products through subscription. It also enables the creation of catalogs, price and quote management, as well as the tracking of purchases, invoices, and late payments in an omnichannel way. It is part of the Revenue Cloud, along with Salesforce CPQ and Salesforce Billing .


Salesforce Revenue Cloud, the holistic solution for your company's growth
Revenue Cloud is a solution that integrates tools designed to facilitate the management and optimization of your revenue life cycle.

SEE MORE ➜

How does Subscription Management work in Salesforce?
A subscription management solution must be, above all, very intuitive, simple and fast. We are no longer in the era where a customer would contact you to buy a subscription and then modify it. In fact, many people are looking to subscribe and place their orders automatically, with very few clicks.

Salesforce Subscription Management is ideal because it does a lot of things behind the scenes, unnoticed by the customer. It brings subscriber data into a single source of truth, connects channels and tools into a single platform, and performs both automation and AI-powered analytics throughout the entire process—all in the name of providing the best experience from purchase to subscription renewal or upgrade.

How does Salesforce Subscription Management work?
In detail you can see this:

Customer purchase of a product and/or subscription service. Sales representatives have previously designed product catalogs with payment rates based on their pricing models. Price estimation and quoting, as well as the creation of product bundles, can be advantageously supported with Salesforce CPQ. Customers can purchase either through interaction with a salesperson or in self-service mode directly from your company's website.
Sales reps step in. When customers change their subscription orders, have questions, or need help closing the purchase, it's time for sales reps to shine. They can access the Administration tool to update subscriptions, modify quantities, apply discounts, and send the new quote with price and terms.
Encourage recurring subscriptions by strengthening customer relationships. While the customer can continue to upgrade their subscriptions on their own, sales reps can influence this decision. With Salesforce Revenue Intelligence, you can easily visualize the best opportunities based on purchasing trends, behavioral history, and AI analytics.
Invoicing correctly and quickly. Through the integration of Salesforce CPQ and Salesforce Invoicing, each stage of the revenue lifecycle is automated. This means that manual transfers between sales and finance are replaced, reducing both errors and negative experiences.
Subscription pricing models
At this point, it is worth asking: what are the subscription models? Subscription models are closely linked to the price that must be paid for them. These are the most common:

Static pricing: A fixed price is used for each product.
Usage or consumption pricing: model based on the use or consumption of a certain product or service. The bill will be proportional to the number or volume demanded. For example, a company needs a certain amount of printer ink greater than that needed for a home printer. This model is also widely used by telecommunications service providers.
Contracted prices: the price is negotiated in advance through licenses. This is essential for self-service purchasing as it does not require negotiations with sellers.
Tiered pricing: Product and service packages with different levels and prices, adaptable to different customer groups. Typically, each level offers certain functionalities at a fixed price. For example, when certain business software companies sell different versions of their products divided into Personal, Business and Premium. The customer has the option to choose the subscription that best suits their needs and possibilities.
Percentage of Total: When one product is quoted as a percentage of another. For example, additional technical support included in the purchase price of software or hardware.
Choosing a subscription pricing model is important because it impacts customer retention and business growth. No one model is better than the others, so when choosing, you should consider which one best supports your company's business purpose and the needs of your customers.

Salesforce Subscription Management Benefits
Its main benefits are:

Allows customers to seamlessly purchase, upgrade, renew and pay for products through self-service channels such as e-commerce, mobile apps and other sites.
Automate and simplify catalog creation, price management, invoice generation, payment processing, credit memo issuance, and tracking customer purchases over time.
Create a single source of information shared by all customer contact areas.
Enables AI to score invoices based on the likelihood of late payment. The finance team can use these scores to prioritize higher-risk invoices.
It makes it easy to view crucial customer data and key performance indicators through simple and intuitive dashboards, updated in real time.