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The subscription economy is on the rise, but as companies scramble to break into this hot market, many neglect a key success factor: the payment experience.
The subscription management and recurring billing solutions leader Recurly recently released a new study conducted by Forrester Consulting showing that payment challenges are causing adverse effects on subscription companies’ ability to grow and scale.
They found that issues with payments create revenue loss, damage the subscriber relationship, and negatively impact brand perception. Even worse, the subscription leaders polled acknowledged that they weren’t confident in their capacity to deliver optimal subscription billing experiences.
To dig more into this trend, we sat down with Recurly’s chief marketing officer Lina Tonk to discuss her perspective and learn how Recurly is helping subscription companies optimize billings and payments to drive growth.
Recurly’s report mentions failed payments leads to disillusionment across teams and hinder tech investment. What are some ways that companies can address this disillusionment in order to encourage innovation?
Tonk: According to our report, only 7% of respondents had confidence in their capacity to deliver superior subscription billing experiences. Subscription companies should prioritize improving their payment systems to minimize failed payments, to combat disillusionment and encourage innovation. This ultimately reduces user frustration and improves customer experience, building the momentum and trust necessary to boost innovation while also reducing revenue loss and customer churn.
What do you believe this data indicates about today’s subscription consumer? Where would you put them on the spectrum of maturity?
Tonk: Today’s subscription consumers have high expectations regarding their payment experience. They value convenience, reliability, and transparency in their transactions, are less tolerant of disruptions, and are more likely to switch or terminate services if their expectations are not met. Our study found that issues with payments led to 53% of respondents observing damaged subscriber relationships and 45% witnessing a decline in brand perception. It also hurt revenue, with 61% reporting revenue loss. Consumers’ discernment and selectiveness places them on the higher end of the maturity spectrum, making it even more imperative for subscription companies to innovate and evolve their payment systems.
Looking forward, what trends do you anticipate in the subscription economy, particularly regarding billing and payments? And how is Recurly helping its customers navigate these trends and leverage them for growth?
Tonk: It’s an exciting time in the subscription economy with explosive growth on the horizon–and now is the time for subscription companies to position themselves to win in this market. Smart companies will lean on more sophisticated automation of billing processes along with tailored experiences that cater to individual customer preferences. Our survey found that 75% of subscription brands are prioritizing technology in the form of improved platforms that can drive more efficient billing, payment, and revenue operations. This is an encouraging figure for the industry.
Additionally, as businesses expand globally, there will be a greater need for platforms that support multiple currencies and payment methods. And benchmark data is key for competing more aggressively, which is why Recurly provides instant data and actionable analytics with our built-in dashboard reports.
