When companies embark on a subscription offering for the first time, they’re often saddled with some incorrect assumptions about the best way to manage entitlement. How do I know when to provide a new customer first access to a service? How about when they upgrade, downgrade, or (heaven forbid) cancel? And what’s the right system, and the right time, to ask the question or provide the answer? How you handle these issues in the traditional e-commerce-storefront-world tends to NOT be the most effective way to do so in the subscription world.
Come with me, if you would, to Philadelphia circa 1979.
I landed a job as a paperboy. On my first day I went to my pickup location and was handed a big stack of that day’s issue of the Philadelphia Evening Bulletin, along with a sheet of densely-typed paper with the names and addresses of all of the customers on my route. Beside each name was one of three subscription designations: “Daily”, “Sunday”, or “Daily plus Sunday”. My manager was apparently not aware I could read fluent English and had a 3-digit IQ so he nicely explained to me what each designation meant. He further pointed out that since today was Monday I would need to deliver to just those marked with either “Daily” or “Daily plus Sunday” (sigh) and then sent me on my way. I was, however, given one more piece of critical advice, “Don’t lose this list, Brendan!” And so, with great dedication, I delivered my papers.
What was interesting is that I did not get another list on Tuesday! Nothing at all! Did that mean that I had no papers to deliver that day? Au contraire! It meant something simple, albeit more labor intensive than having Tuesday off. Getting NO list at all meant “There are no changes to your route since the last time we gave you a list”, or “Keep doing the same thing you did yesterday!”
Over the course of the next year-and-a-half of my paperboy career, my manager informed me only of the CHANGES I needed to make to my route. Who the new customers were, who were the customers that wanted to change from one type of subscription to another, and who were the ones who were so shockingly unimpressed with my amazing fold-and-throw-from-my-careening-bike-skills that they had opted to cancel their subscriptions entirely.
My point? Efficiently delivering a subscription should NOT require a service provider to ask a central system, each and every time, if it’s time to deliver a subscription. Should I deliver to this guy? How about this one? How about this one? OK now how about this one? Instead, the central system (aka the system of record, say, your billing system) should automatically tell you who your customers are and what they get. It should push incremental changes to you as they happen with the assumption that, until you receive further instruction, the current list is what to deliver! And if your billing system (aka the central system of record) has the capability of pushing that information out to you the instant any change occurs, well, all is as it should be. It’s a simple and elegant solution provided your billing system can do it. It removes a cumbersome and unnecessary step when it’s time to give them the service they have dutifully paid you to receive.
– Brendan O’Brien, Chief Architect & Co-founder, Aria Systems
The Aria Cloud Subscription Billing Platform was chosen by brand name companies such as AAA NCNU, Experian, Pitney Bowes, Red Hat, Ingersoll Rand, EMC, VMware, and HootSuite to grow or evolve their recurring revenue.
Just learning about subscription billing? Download the new Subscription Billing for Dummies book and learn more. Are you concerned about buying the right subscription commerce solution for your company? Consider downloading the Six Key Buying Considerations e-Paper and make an educated decision on the future of your recurring revenue offering.
Brendan O’Brien has been in the subscription services business for over 20 years, and is recognized as a pioneer and thought-leader. It’s fair to say that he introduced the world to cloud billing, and innovated database-driven, enterprise-grade web applications for companies ranging from Medical Manager, to Wright Express, and LaserLink. All this before the concept of “cloud” was even on the horizon. Brendan is trained as a professional stage actor and classical tenor.