A broken billing system can impede success for companies looking to grow faster with recurring revenue models. To be successful you must provide more offerings and better service so your customers continue to buy for longer periods of time. In today’s ultra-competitive marketplace, if you can’t quickly meet changing customer demands then you’re losing dollars.
And if your billing system is broken, your chances for success are slim. Ask yourself:
Are your competitors going to market with new offerings faster than you?
Many legacy billing systems require heavy support from IT or engineering to implement new products, bundles, and pricing instead of allowing the business to easily manage these attributes. As a result, the change process becomes a bottleneck. Today, speed-to-market and flexibility are paramount for success. Product cycles are shrinking, and the opportunity cost of not being first to market is potentially devastating.
Does your billing system constrain the services and pricing you can offer?
What if your line of business determines it can gain market share by going to market with a tiered usage pricing structure, but your billing system can’t support it? Many traditional systems do not provide the basic functionalities – subscriptions, usage aggregation, tiered pricing, discounting, promotions, proration, etc. – required to monetize recurring revenue products and services.
Is your view of customers fragmented?
Knowing your customers – their preferences, history, etc. – is one of the foundational principles in a recurring revenue business. That task becomes more difficult when customer data is spread across a half dozen platforms (CRM, Billing, AR, Provisioning, CSR, Fulfillment, etc.), with no centralized customer view and no orchestration between systems.
When provisioning and billing errors result, customer account views aren’t up-to-date, and the collective customer experience fails to meet expectations, overall customer satisfaction plummets.
Do your customers complain about the billing experience?
They often won’t come right out and say it, but your customers will tell you in other ways that can cost your business. If you’re lucky, a customer will call customer service to get the issue resolved. While those calls are expensive, they aren’t as costly as customer churn. Some customers get fed up and run to the competition or even share their dissatisfaction on social media, especially if problems are recurring.
Are you unknowingly giving products away or charging the wrong amount (revenue leakage)?
Revenue leakage is a simple problem – either you’re giving product away or you’re charging the wrong amount. It’s ultimately a data problem, most often the result of a disconnect between the sales process, billing, and entitlements. Entitlements might be out of synch with billing, usage data might not make it to billing, pricing might not match contracts, etc. The more silo’d your systems – the more likely you’ll see leakage.
If you answered yes to more than one question, you’re likely losing revenue. Don’t let your billing system hold you back. Learn how a modern monetization platform can convert existing assets into a reliable, recurring revenue stream.
Tom Dibble is President and CEO of Aria Systems and a proven leader with more than 20 years experience in the high technology market.