Companies are always looking for ways to save money, but with a global recession still threatening to rear its head in 2023, many are scrambling to consolidate funds and slash budgets. Bloomberg economist Nouriel Roubinesees goes so far as to predict that this“long and ugly”(paywall) recession could last the entirety of this year. So, how can subscription-based businesses—or businesses of any model—compete and win in the marketplace during a time of high competition and economic downturn?
The key to making your business recession-resistant is keeping your current customers engaged and satisfied. You can weather the storm of financial uncertainty by improving the customer experience, maintaining recurring revenue streams and making data-driven decisions.
1. Improve CX through subscription management.
It’s easy to court a prospect up to the point of subscription and then drop off, letting them wade through the logistics of their subscription—and that’s what many companies do. But as the marketplace becomes more sophisticated and subscription-based services provide more options to better cater to clients’ needs, those logistics can become pretty complex. A good subscription management strategy is crucial to keep existing clients and garner new ones.
So, what exactly does subscription management involve? This term refers to overseeing your customers’ subscriptions, ensuring onboarding goes smoothly and giving them excellent customer service throughout their journey. It includes customer service and support, tracking revenue and customer preferences, sales onboarding and reporting and analytics.
It can also include payment schedules, renewals, upgrades and downgrades—essentially, every part of the payment and billing process until the customer cancels their subscription—not just the tactical aspects of billing. And with the subscription and billing management market showing anannual growth rate of 14%, including billing in your subscription management strategy is the right move.
If this all sounds like a lot of work, it’s because it is. Thankfully, emerging technologies can record and analyze data, optimize workflows and help track various aspects of payment cycles using technology and software that can easily integrate with existing tech stacks.
2. Take a customer-centric approach.
Maybe you have no choice but to slash budgets or create new pricing models—and that’s okay. But if you want more contract renewals, there must be something new you can offer to benefit your existing customers. First, ask yourself if there are any additional support services or products they're looking for. Is there a way to generate more profit with the tools and technologies your company already has? Leverage your current customer data and ask them for their feedback. Showing your customers that you value their investment can boost loyalty and help maintain a consistent recurring revenue stream.
Customer-centric companies are60% more profitablethan companies that don’t focus on customers. Utilizing a platform that can track your customer behavior can help you prioritize their experience and see things from their unique perspectives.
3. Help make your business recession-resistant through data-driven budgeting.
If you know how much money is coming in every month, you know how to save, spend and where to invest your company’s funds. This is a vital first step to taking control of your business' finances and setting up a recession-resistant budget. Many companies have spreadsheets with pricing information, client lists, customer margins and more, but analyzing this data and turning it into an actionable financial plan can be incredibly time-consuming.
With our ever-changing economy and culture, your data-driven strategy must be flexible and able to adapt to the most current data insights and trend projections. The best way to track data and use it to inform your financial strategy is through technology. For example, using a comprehensive subscription management platform that includes payment automation and data analytics reporting can help enable you to look at the entire life cycle of each client and the health of your company as a whole.
This plethora of information can also be utilized by organizations looking to receive more funding. Venture capital is often granted to emerging companies that demonstrate their high-growth potential—but this can be challenging to visualize in a million disorganized spreadsheets and documents. Using technology to consolidate and organize this information can give you an edge.
Remember that in times of economic downturn, your current customer is your best friend. So, rather than focusing on acquiring new prospects and generating more leads, create the best experience you can for your existing supporters. Doing so can go a long way in helping your company stay afloat and succeed during a recession.