Breaking the Shopping Cart

You can’t blame people for framing their worldview on their experience. We all do it, and there are experiences that are common to us all and seem, on their surface, ubiquitous. Neither can we be blamed for desiring simplicity wherever possible. In demonstration of both of these points I offer the humble Shopping Cart:

If I go online to buy a $50 sweater, during checkout I provide a credit card and it gets dinged for $50 and I’m all set.  A single $50 transaction just occurred, right?

Wrong.  In truth, two transactions occurred.  Bear with me, here:

  • Transaction 1:  Merchant makes the determination of “You owe me $50, Brendan.”  I.e. They CHARGED me $50.
  • Transaction 2:  Purchaser Brendan says “Here is $50, Online Merchant”.  I provide my card and authorize a PAYMENT for $50.

I know, I know… you are thinking “That’s a distinction without a difference!”  That’s understandable.  But trust me:  the most commonly held assumption that Aria finds itself having to help “break” in the mind of the would-be subscription provider is this one, this implication that there is a permanent and balanced match between figuring out what someone owes you and the amount they then do-or-don’t give you.  After all, this nice, neat, one-to-one transactional balance is USUALLY true in the real world.  But “usual” does not equal  “always”. When your goal is to manage a perpetual relationship with a customer to whom you provide a multi-layered set of subscription-based offerings, the exceptions kick in hard and fast, often with a frequency that renders the word “exception” meaningless. The attractively simple nature of “Shopping Cart” is quickly challenged with one-to-many, many-to-one, and many-to-many relationships between charges and payments, and the Boolean “I got paid or I didn’t” model morphs into a gray continuum with all manner of partial payments separating the poles of “all” and “none”.

The “simple” is always enticing, but committing to a billing system that is built on “simple” in a highly competitive landscape can be a choice quickly regretted.  As you move your business into a subscription economy, imagine our humble Shopping Cart lying broken and forlorn in the parking lot, with one wobbly wheel and another that doesn’t turn at all, and the dark side of “simple” becomes self-evident. Choose your billing system wisely.

Brendan O’Brien

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. 

About the Author

Brendan O'Brien

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.

The Forrester Wave: Subscription Billing Platforms, Q4 2015

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