As you might know by now, customer churn is one of the primary reasons that SaaS companies fail.
Unlike many industries, if software companies grow at only a 20 percent rate, it has a 92 percent chance of ceasing to exist within a few years. That means that you need to figure out how to obtain a predictable and recurring revenue source, fast.
Typically, SaaS companies do this by implementing recurring revenue models. But the nature of SaaS subscriptions and recurring revenue models means that payments processing can be tricky — especially for companies with customers from around the world.
So what can you do to improve the payments experience, reach more global customers, reduce the operational headache associated with multiple payments providers, and ensure sustainable growth at the same time?
4 Tips For Managing SaaS Subscriptions for Global Customers
1. Give customers the ability to pay in their native currencies and preferred payment types.
SaaS companies have the ability to grow into different corners of the world quickly and easily. But as you grow, you need to make sure that your subscription engine supports the primary payment types in each country where you sell your product.
For example, if you want to sell in Europe, you should offer SEPA to appeal to European customers. However, if you want to sell in the U.S., ACH payments are going to be more popular to those customers.
You might be wondering: Why does it matter? Can’t my bank just convert the currencies?
Sure, your bank might technically process global payments, but if it doesn’t have a truly global presence — i.e., a global network of local banks to route transactions to — then you’ll be paying tons of unnecessary cross-border processing fees.
Plus, this model degrades the customer experience. For example, Monday.com is an israeli software provider of project management software. However, their U.S. shoppers would never know it, because when US shoppers checkout, the checkout page displays the price in USD. Plus, their transactions are processed via local US banks, so the monthly subscription is processed without fail every month.
Any amount of friction in the checkout process is all it takes to push a potential customer into the arms of your competitors. If you want to successfully sell your products in different parts of the world, then you need to have banking relationships and processing capabilities in those areas.
2. Offer flexible subscription plans.
Subscription-based customers like flexibility, convenience, and transparency over their payment models. Capture more recurring revenue by offering custom subscription plans to your customers.
Look for a payment processing provider that gives you enough control over your subscriptions to offer:
- Pre-defined subscription plans: In this subscription plan type, you can set up plans to be quarterly, monthly, annual, semi-monthly or whatever cadence works best for you.
- Free trial plans: Offering a free trial period is a great way to introduce new customers to your product and get them hooked before they’ve had to pay. Choose a payments provider that allows you to define a trial period that switches to the regular plan automatically.
- Auto-renew: Most subscriptions require customers to renew their plan each year. To make things easier for you, find a subscriptions management solution that automatically alerts customers when their renewal is up.
- Upgrades and Discounts: Offering personalized subscription plans and discounts like family plans and student discount plans is a great way to boost customer loyalty. However, not all payment processing providers offer this, so look for one with maximum flexibility for both you and your customers.
3. Use automation and retry logic to increase successful transaction rates.
Transactions fail for a number of reasons — and sometimes, that reason is as simple as an outdated card.
Luckily, you don’t have to manually contact your customers every time a transaction is declined. Instead, boost your successful transaction rates by setting up subscription retry logic and automatic account updates.
Retry logic automatically retries a failed transaction a pre-set number of times before the system gives up. If, for example, a customer’s subscription payment is billed on the first of every month and their mortgage payment is also billed on the first, they may not have money on their card to follow through with the subscription payment. The automatic retry system can try to process that transaction again up to four times over the course of two weeks to try to save the sale. Usually, by that time, a customer will have funds in their account, allowing the transaction to go through.
Additionally, automated account updater functionality will automatically reach out to the customer’s bank for their new card information in the case of an expired credit card. This allows you to save countless transactions with no interruption to your customers or your business.
4. Consolidate your payment gateways.
Recurring revenue models create brand loyalty, business growth, and income you can count on — but only if you have the payments infrastructure to support them.
If you don’t have the ability to process payments from anywhere around the world, then your potential revenue growth is hindered. Some companies try to get over this hurdle by investing in multiple payment gateways to process global transactions.
The problem is, when you have multiple payment gateways that each process payments in a different part of the world, you might experience a few challenges, including:
- Checkout abandonment.
- Excessive transaction fees.
- Difficult reconciliation.
By consolidating into one global payment gateway, you can soothe the headache of reconciliation by pulling one streamlined report, reduce overhead costs from paying cross-border fees to multiple providers, and encourage more customers to follow through with the sale by allowing them to pay in their native currency.
SaaS Payments Made Easy with the Right Global Payments Provider
Your SaaS company has the ability to grow around the world — and your payments provider should be the one getting in your way. By consolidating your payment gateways, automating your subscription billing, and customizing the checkout experience, you can build a payments landscape that supports your global customers and maximizes your growth.