The limitations of billing-focused solutions

To purchase a platform that really only offers a billing tool might seem like the cheapest option for your company, but in the context of subscription businesses it's a bit like buying a coffee machine for a cafe and not budgeting for any coffee beans. You think you've paid for everything you need but you don't have the means to run it.

What isn't always clear in the early days is that a "billing" system will ultimately become the brain of the business, and brains need to be able to think dynamically—connected to every part of the body, not just one function.

It's true that in its first few months of trading, a young subscription company may be able to manually oversee the entire customer journey, and therefore opt for a standalone billing solution. However, it will quickly become insufficient, requiring manual changes as customers upgrade/downgrade or alter their subscriptions; manual tailoring of the product catalog for sales teams; manual input and tracking of offers, discounts and promotions; manual awareness of billing and payment processes across global territories—the list goes on. 

All the while, you never have end-to-end visibility of customer behaviors in order to understand individuals, help prevent churn and plan informed service and product updates. Nothing is connected, including your data, making it ripe for error. On one account that might not be a major issue, but at scale that's almost impossible to handle accurately.

The hidden costs of upgrading billing platforms

So, what does this have to do with the cost of your platform? Can't you just change a basic billing solution for something more sophisticated when you need more capabilities? Here's where it gets financially interesting. The short answer is yes, and we can facilitate that. However, it's always trickier to unpick existing processes than to start as you mean to go on.

Most subscription platforms market themselves at a fairly universal entry price, but it only provides access to a basic license fee or service. That's appealing because it's a comparatively low level cost that's suited to young businesses, mindful of their upfront expenditure. 

The provider can show you everything that the system is able to facilitate, but will probably gloss over how it facilitates those things, unless you ask directly. Typically, none of those things we have mentioned—the customer journey, the price automation etc. etc., have been accounted for in that initial fee. Every item, and every update to every item is an additional cost, either because it's an additional service, an additional provider or an additional customisation. That comes with growing and unlimited, somewhat hidden expenditure. In essence—you not only have no coffee beans accounted for in the initial fee, but you also have no insight at all into how many coffee beans you're going to need in order to operate.   

Whether those capabilities are part of the native system and included in the initial price is left very much to the fine print. The first customisation won't seem like a big deal, nor will the second, but as time goes on and the system becomes more complicated you become increasingly committed (notwithstanding contract terms). The entire operation becomes evermore costly to develop, and both logistically and financially cumbersome to maintain over time. 

Alternatively (or additionally) you might try to tack on solutions from different providers—crowbarring technologies to work alongside one another, all with different update schedules, teams, you have no real insight into what's connected where and how, or who you need to talk to if something goes wrong. In a fairly short space of time, you're typically locked into one (or more) contracts, each with different end dates, and you may well have expanded your employed team in order to manage the ongoing customisations (which is enormously expensive but not necessarily all that productive a solution). 

All in all, even though we can make migration easy, it's not necessarily simple or quick to extricate yourself from that infrastructure—at that point it's not just a case of switching platforms, but neither will the costs keep mounting.

The importance of choosing a business partner

Of course, when speaking to the sales team on day one, you could ask how the system supports all these functions, so at least you’re aware that you’re writing an open cheque. However, if you're not an expert in the tech itself, how would you know exactly what to ask? You're the business expert—it doesn't mean you should know everything about technology because that's your provider's job.

The problem is that most providers don't see themselves as partners and when you're purchasing a platform that will be instrumental in the success of your business, you need someone who is invested in the long-term sustainability of the relationship. You need someone who can see three steps ahead and who understands that you will have a customer who wants their invoice delivered on the 3rd of the month while someone else wants it on the 30th of the month, caring how that small action impacts the relationship, and who gets that the reverberations of those seemingly small choices, spread across hundreds or thousands of customers is a lot to handle unless it's reliably and simply automated. You also need someone whose sales team genuinely understands what they're selling—not just that they need to sell it to reach a monthly target.

In other words, you need someone who's standing there with an unlimited supply of coffee beans.