Subscription Management SoftwarePhoto by Danial RiCaRoS

Originally Posted On: https://softwareapplications.com/subscription-management-software/

Introduction

Companies that want to increase customer acquisition and market growth are quickly adopting digital business models. New subscription and recurring revenue-based businesses are constantly being launched across practically every industry.

Gartner estimates that by 2022, more than 90% of software providers will have upgraded to subscription-based business platforms. These types of business practices will soon become standard in modern day business. Even well-established industries like telecom and utilities that have been utilizing subscription models for years will need to update antiquated systems.

Who Should Read This Guide

This buyer’s guide has been created for product, IT and finance professionals looking for guidance on how to evaluate their options and determine the best decision-making criteria when it comes to subscription management software. The cloud subscription management market is growing and evolving rapidly as more competitors enter to service the high migration to digital business. However, the breadth and depth of providers vary greatly and can easily confuse buyers.

Key Learning Outcomes

Product, IT and finance professionals will be able to use this analysis to understand the competitive situation, as well as key trends and players.

You will walk away with a list of decision-making criteria that should be evaluated against when choosing the best subscription management software for your business.

You’ll be able to have a direct comparison across key product and service-level indicators between the most popular solutions in the market, including Zuora, Chargify, Chargebee, Recurly and Vindicia.

What is Subscription Management Software?

Subscription management software systems store your product catalog, pricing, your customer subscription data, transaction history and billing cycles. For a software as a service (SaaS) business, additional add-ons include product trial management, grandfathering pricing changes where applicable, trial-to-paid upgrades, downgrades and cancellations across the entire subscription lifecycle.

Today’s SaaS-based subscription products typically involve numerous changes to the subscription during a customer’s lifetime. This is a significant differentiating factor from traditional purchases. Traditional billing solutions are good at billing one-time sales, but more often than not, they are unable to support newer digital-based businesses. Cloud subscription management solutions are rapidly gaining popularity because they provide significant help in managing these emerging and complex digital business models.

Should You Build or Buy Your Subscription Management Software?

When deciding on whether to build or buy software, there are many businesses who choose to build their own subscription management solution.

However, taking this approach can quickly become a burden on both engineering and IT teams.

Additionally, in the long run, the choice can lead to negative downstream impacts on finance, marketing and other teams. If you’re thinking about subscription management software, it’s important to consider the risks that are associated with building your own system.

Risks to Building Your Own Solution

DELAYED TIME-TO-MARKET

No matter how much planning you do, it’s always going to be a challenge to stay on track when building, testing, and implementing your software solution. Especially if your IT and engineering teams have never created such a solution before, it’s difficult to predict, and therefore proactively address, possible setbacks along the way.

Additionally, if your team has multiple priority projects on the go, there’s a great risk that time and resources will be spread very thinly. With every hiccup, your launch to market gets delayed, which means you face increased budget costs and miss out on revenue opportunities.

LACK OF ONGOING INNOVATION

Your team may be able to build and launch the software according to your timeline, but what about the ongoing advancements of your subscription management software? The problem is that you build just for what the business needs today.

To move things along faster, the system might be hard coded, but that acts as a significant challenge in being able to grow and respond to market demands. Additionally, with limited resources or resources that possess a lack of up-to-date knowledge, you might not have the proper skills in place to continually innovate your systems.

COSTLY INTEGRATIONS MAINTENANCE

The costs associated with building your subscription management solution can be much greater than anticipated because as an integral part of your existing tech stack, you will need to build and maintain all of the integrations to your ecosystem, including payment gateways to process customer payments and gateway returns.

Plus, you’ll need to consider dealing with currencies, tax models and support for a variety of new payment methods as they evolve.

FAILING TO BE PCI COMPLIANT

If you’re building a homegrown subscription management solution that will hold sensitive customer data, it’s crucial to be PCI compliant or you risk fines, data breaches and loss of customer trust.

To achieve PCI compliance, you need a mature security program that covers application, network, host-based and data security. All of this can easily add up to over $1 million.

TOTAL COST OF OWNERSHIP

The total cost of ownership for enterprise software is the sum of all direct and indirect costs incurred by that software. Startup and operational costs are commonly considered, such as software, hardware, data migration, and training. However, many companies forget that retired systems can still incur considerable costs.

If you decide to move on from your in-house built system, consider the expense of ensuring compliance by migrating and keeping transactional data available for several additional years.

What Should You Look For Before Purchasing?

When evaluating a good subscription management solution for your business, service-level indicators are just as important as product-level indicators. Here’s a breakdown of the features that you should look for when evaluating vendors.

Product-Level Indicators

Subscription and Recurring Billing Management

No matter how much planning you do, it’s always going to be a challenge to stay on track when building, testing and implementing your software solution.

Especially if your IT and engineering teams have never created such a solution before, it’s difficult to predict, and therefore proactively address, possible setbacks along the way.

Additionally, if your team has multiple priority projects on the go, there’s a greater risk that time and resources will be spread very thinly. With every hiccup, your launch-to-market gets delayed, which means you face increased budget costs and miss out on revenue opportunities.

Recurring Payments

The software should enable the customisation of invoices and statements by making posting and drafting editable. It should also provide projected invoicing that shows future billings.

Integrating with multiple payment gateways and being able to support a variety of payment methods is also critical, especially if you have a self-serve subscription model.

If your sales are largely driven by interaction with your sales team, payment methods will need to include support for wire transfers, cheques and other offline forms.

Dunning Management
Dunning is the process of handling failed online payments and declined credit cards to recover lost revenue. It’s estimated that 20-40% of a subscription business’ revenue churn is involuntary churn due to payment failures. Ensure the software has tools that help with bill collection activities.

This feature means you won’t have to manually check accounts for declined charges. Retrying failed payments will be done automatically and customers will be notified about declined payments. This is especially useful for subscription businesses with a high volume of transactions.

Reporting & Analytics

With a good software, you should be able to quickly understand the status of your subscription business at any moment through detailed reporting and dashboards that display data in exportable formats.

You should be able to access reports on checkout abandonment and common SaaS metrics like monthly and annual recurring revenue, and churn.

Integrations

Subscription management software is only one piece of the puzzle when it comes to delivering a top-notch subscription experience that maximises your revenue operations.

To be the most robust, the software needs to be able to integrate with other components of your tech stack, including your accounting, CRM, help-desk, analytics, customer success and marketing, just to name a few areas.

Compliance & Security

Compliance and security levels should be a top priority in keeping your customer data secure and upholding their trust in your management processes.

When conducting your research, ensure that the software is PCI-DSS Level 1 and SOC1 Type 1 compliant. Also ask whether the system undergoes constant vulnerability scanning, how they handle GDPR and PSD2 regulations and does the solution mandate two-factor authentication for all its administrative operations.

Service-Level Indicators

Beyond product features, consider what other factors are important in your decision-making criteria. You want a vendor that’s easy to work with and responsive whenever you have questions about how to use the software features or face operational dilemmas. Every second counts when potential sales are on the line.

Here are some questions to ask vendors when evaluating the level of service and customer support they are able to provide:

  • What service level agreements do they offer and how quickly will they respond you?
  • Do they offer continued relationship management such as a Customer Success team?

  • Do they have dedicated customer support that will provide hands-on assistance to your team until the onboarding is complete?

  • If you decide to eventually switch subscription management solutions, will they port sensitive data securely and map it to the other provider?

Comparing the 5 Most Popular Solutions

To help you through your buying journey as you explore which subscription management software is the best solution for your business needs, here’s a comprehensive comparison of the five most popular solutions currently on the market.

Methodology:

We aggregated the data based on customer reviews from the most popular peer-to-peer review sites, service status indicators from vendor partners, and other publicly accessible data resources.

Zuora is an end-to-end subscription management platform that covers customer acquisition, recurring billing management, payments, collections, revenue recognition and subscription metrics. Founded in 2007,

Zuora employs more than 800 people. Zuora is headquartered in San Mateo, CA, with satellite offices throughout North America, Europe, China, India, Japan, and Australia. In 2019, Zuora was selected as the 2019 Innovator of the Year by the San Mateo County Economic Development Association

Zuora Billing is one of the company’s flagship products and has more than 1,000 customers to date. The product comes in multiple tiers, allowing businesses to move up tiers without disruption as their subscription programs grow. The company recently acquired Leeyo Software, now renamed Zuora RevPro, to add advanced revenue recognition capabilities to its portfolio. Zuora’s Connect Marketplace provides additional add-on applications, such as payment gateways, coupon codes, tax connectors and lockbox connectors. 

Target organization type

Mid Market
Enterprise

Industries

SaaS, B2B, B2C

Starting price

Sales needs to be contacted for a quote

Awards won in 2018/2019

2019 Innovator of the Year by the San Mateo County Economic Development Association

CEO Tien Tzuo Named One of the Top 50 SaaS CEOs of 2018

Cloud Award for Best Payment, Finance or Billing Solution – 2018

 

Included in the following industries reports

Gartner & Forrester

BBB Rating

B-

Customers

Deloitte, Ford, Ericsson, Autodesk, Marketo, Intuit, Zendesk

Financial status

Public

Number of employees

1,221

Glassdoor employee rating

80%

89% Approve of CEO

Since its launch in early 2010, Recurly has deployed subscription billing for thousands of subscription-based SaaS, Web 2.0, Mobile, content and publishing businesses throughout North America and the EU.

Recurly’s subscription management system includes analytics, dunning tools and revenue recognition features. Additionally, the company provides development libraries that support JavaScript for white-label integration into customer environments.

Recurly competes primarily for B2C and some B2B credit-card-focused customers. It targets businesses seeking an efficient medium- to high-volume subscription management tool that is easy to deploy and offers PCI compliance. Recurly also recently unveiled a ML-based Revenue Optimization Engine, designed to repair transaction declines and help businesses boost their monthly revenue.

Target organization type

Mid Market
Enterprise

Industries

SaaS, B2B, B2C

Starting price

Sales needs to be contacted for a quote

Awards won in 2018/2019

N/A

 

Included in the following industries reports

The Forrester Wave™: SaaS Billing Solutions, Q4 20195

Gartner’s Competitive Landscape: Cloud Subscription and Recurring Billing Management, North America

BBB Rating

A+

Customers

Asana, Twitch, CBS Interactive, BarkBox, Sling, Showtime, Speedo, AMC Networks

Financial status

Private, $39.2M in funding

Number of employees

200

Glassdoor employee rating

80%

74% Approve of CEO

Chargebee automates subscription management, recurring billing and invoicing, payment collection and recurring revenue accounting by integrating with leading payment gateways. It services over 15,000 customers across more than 50 countries. They employ over 300 people and are backed by several investors. 

Chargebee competes primarily for the business of SMBs. It also helps a handful of larger firms where a portion of transactions are derived from subscription-based initiatives leveraging moderately complex pricing models. Chargebee differentiates based on having one API layer able to address most SaaS billing needs, including subscriptions, recurring payments, billing and analytics. Its customisable platform supports more than 30 leading worldwide payment gateway integrations. 

Chargebee is unique in that it allows users to start for free (up to their first $50,000 in revenue). Businesses can also add unlimited users/user roles, with role-based access, so that their support, sales and accounting teams have access to relevant, up-to-date information on their customers.

Target organization type

SMB
Mid Market

Industries

SaaS, B2B, B2C

Starting price

$299/month

Awards won in 2018/2019

2018-19 Cloud Award for Best Payment, Finance or Billing Solution

 

Included in the following industries reports

Gartner’s Competitive Landscape: Cloud Subscription and Recurring Billing Management, North America

BBB Rating

A+

Customers

Okta, Percona, Envoy, Study.com, Calendly, Fujitsu, Freshdesk, Doodle

Financial status

Private, $39.1M in funding

Number of employees

223

Glassdoor employee rating

80%

89% Approve of CEO

Chargify is a billing and revenue management platform for fast-growing SaaS businesses. Founded in 2009, Chargify started out as a team within Grasshopper focused on the core needs of recurring billing. In 2016, the company was acquired by SaaS holding company, Scaleworks.

Over the past decade, Chargify has expanded its offerings to address the complexities of SaaS revenue management, with core functionalities in elastic billing, revenue operations and detailed reporting. Headquartered in San Antonio, TX, the company has thousands of customers and processes more than $1B through its platform annually.

The company works with both B2B and B2C customers, with a primary focus on fast-growing B2B SaaS companies between 10 to 100 million annual recurring revenue. They target businesses with medium to high complexity that cannot build or maintain custom billing code in-house, and subscription-based businesses looking to maximize recurring revenue at scale by regularly adapting, experimenting and personalizing offers.

Target organization type

Freelancers
SMB
Mid Market
Enterprise

Industries

SaaS, B2B, B2C

Starting price

$149/month

Awards won in 2018/2019

2019 APPEALIE SaaS Award for SaaS Customer Success Award

Included in the following industries reports

2019 APPEALIE SaaS Award for SaaS Customer Success Award

BBB Rating

Not BBB accredited

Customers

Newsweek, Stack Overflow, Vend, Gravity, GoAnimate, Mail Gun

Financial status

Private, subsidiary of Scaleworks

Number of employees

65

Glassdoor employee rating

60%

Inadequate data for approval of CEO rating

Amdocs acquired Vindicia in 2016. The company offers two product lines: Vindicia CashBox and Vindicia Select. Vindicia CashBox is its core recurring subscriber and billing management platform. Vindicia Select is its stand-alone revenue recovery service to obtain failed payments. Its revenue recovery tools help with churn prevention and revenue uplift, which in turn can make the total cost of ownership of the Vindicia solution attractive. The system supports all subscription lengths, trial periods, freemium models and usage metering. It offers sophisticated reports, dashboards and analytics.

Vindicia targets businesses that use electronic payments such as credit card, new digital payment methods and automated clearinghouse, in addition to an integrated solution encompassing customer acquisition, billing and retention. It competes most strongly in B2C media, entertainment, content and telecom segments, and B2B businesses that have similar requirements. Post-sale, Vindicia also offers customers with ongoing consulting and analytics services.

Target organization type

Freelancers
SMB
Mid Market
Enterprise

Industries

SaaS, B2B, B2C

Starting price

Sales needs to be contacted for a quote

Awards won in 2018/2019

CNP 2018 Best Subscription/Recurring Billing Solution

 

Included in the following industries reports

Gartner’s Competitive Landscape: Cloud Subscription and Recurring Billing Management, North America2

BBB Rating

A+

Customers

None stated on website, but the majority of customers are B2C

Financial status

Private, subsidiary of Amdocs, $36.6M in funding

Number of employees

120

Glassdoor employee rating

60%

77% approve of CEO

Subscription Management Software Comparisons

Zuora Recurly Chargebee Chargify Vindicia
Features & Functionalities 83% 83% 89% 81% N/A
Ease of Use 71% 85% 88% 82% N/A
Ease of Setup 71% 73% 87% 81% N/A
Ease of Admin 77% 80% 90% 86% N/A
Popular Native Integrations NetSuite
PayPal
QuickBooks
Sage Intacct
Salesforce
Workato
Authorize.net
NetSuite
PayPal
QuickBooks
Slack
Stripe
Zero
Zapier
Authorize.net
PayPal
QuickBooks
Salesforce
Shopify
Slack
Stripe
Xero
Zapier
Authorize.net
PayPal
QuickBooks
Salesforce
Shopify
Stripe
Workato
Xero
Zapier
Kount
Salesforce
ApplePay
GooglePay
WorldPay
Hybris
API Resources
Professional Services Offered
Incident History in 2019 224 68 17 12 115
Quality of Support 73% 83% 89% 81% N/A
Ease of Doing Business 78% 85% 88% 82% N/A
Customer Support 24×5 Live support Online Ticket Support
Email Support
24×7 Community
24X7 Live support
Help Center
Documentation Community Forum
24×7 Live support
Help Center Knowledge Base Documentation and Community Forum
24×7
Email support
Support Tickets
Live Chat
Self-help
24/7 Live Support
Average Customer Rating 77% 86% 94% 86% N/A
Value for Money 70% 83% 86% 80% N/A
View More View More View More View More View More

Overall Customer Rating

Chargebee

Chargebee was ranked the highest by customers out of all the solution providers evaluated. The company consistently received the highest score across all product-level indicators, and was also rated highly for service-level indicators.

Positive remarks from customer reviews also include the platform being incredibly easy to use, whether it’s creating a new plan, collecting unpaid invoices or keeping track of the total MRR.

Where the platform lacks is in the reporting dashboard, which could be made a little more robust and user friendly. Although some customers experienced difficulties in customising invoices and other features of the platform, the customer support team was rated highly at answering questions and providing clarity.

Zuora

Across the board for product- and service-level indicators, and overall, Zuora was rated the lowest by its customers. Zuora is the largest subscription management software company in the market, regularly wins industry awards and Forrester names the company as the leading subscription provider. However, results from customer reviews tell a different story when compared to the products and services provided by competitors. 

The software offers a solid billing system that is able to cater to companies of all sizes, are constantly adding new functionalities and the security of the product is very well developed. Unfortunately, many reviews stated that the software is very buggy, slow and not the easiest to use. Also, the complexity of the tool results in a double-edged sword where it has the capability to be a very powerful platform, but the learning curve is immense and prevents users to be productive at a quick rate.

Vindicia

At the time this buyer’s guide was written, Vindicia did not receive enough customer reviews for a valid representation of data. Based on Gartner’s assessment, Vindicia’s platform appeals to companies seeking an integrated solution encompassing customer acquisition, billing and retention. It competes most strongly in B2C media, entertainment, content and telecom segments, and B2B businesses having similar requirements. 

Features most commonly used include electronic payments such as credit card, new digital payment methods and automated clearinghouse. Its revenue recovery tools help with churn prevention and revenue uplift, which is appealing to businesses when considering the total cost of ownership of a subscription management solution. Post-sale, Vindicia also offers customers ongoing consulting and analytics services.

Recurly

Based on customer reviews, the platform’s user interface is very appealing, easy-to-use and intuitive.

Setting up the platform can take some time and require support, but once the software is implemented, it is easy for users to interact with and achieve the tasks they need to get done. 

The quality of customer support was ranked the highest for Recurly. This is particularly beneficial to users when setting up their system, where guidance is highly required. Overall, customers commented that it is generally easy to onboard new internal users.

Chargify

The customer ratings for Chargify were in the middle of the pack. They ranked well for all product- and service-level indicators. Many reviews commented on the platform’s ease of use and setup, and simple user interface.

The quality of the dunning management was very favourable and integration with payment processors was excellent. Overall, the company has created a solid program that works well for SaaS companies.

From a features and functionality standpoint, there are some limitations on coupon set up depending on the type of promo. Also, users are not yet able to update contact information on billing statements after a charge has been processed.

Conclusion

Businesses across all industries have experienced major benefits by automating their subscription management processes with software solutions. But, finding the right tool to automate a complex business process can be daunting for any buyer. Within subscription management, you’ll find an ever growing number of solutions claiming to be the best in the business. Unfortunately, many customers decide on a solution that fails to provide the features, functions and services that are critical to their businesses. Even for subscription management systems that are rated highly by analysts like Forrester or Gartner, you will find case after case of customers describing weak and missing features in their reviews of the systems, as was displayed in this guide.

When conducting your due diligence, make sure you take a broad and narrow analytical approach. From a broad perspective, be as thorough as possible in considering all the scenarios that would utilise your subscription software. On the flip side, be as narrowas possible in identifying all the areas where things could go wrong. With the right subscription management software, your engineering and IT teams will be able to fast-track new pricing, billing, payments, accounting and integrations in order to capitalise on as many new opportunities as possible.

SoftwareApplications.com is committed to helping companies research, compare and navigate the software buying process. Our approach is unique because we aggregate all the meaningful signals across the web so you save time from researching to create more time evaluating which vendor is the best fit for your needs. To learn more about any of the vendors reviewed in this guide, contact us at:

References