The Impact Of AI In Subscription Management Systems
Subscription management platforms have quickly become a core part of business, making it a hot market niche. SaaS companies have flooded the subscription management sector with innovative ideas, recognizing the industry's surge in popularity. Immediately, the subscription industry realized that they could effectively use AI to provide more customized solutions to their customers, thereby improving customer retention.
SaaS business models were directed towards exceptional success leveraging cloud solutions, and the amalgamation of AI with subscription services multiplied the results. In this article, we are going to explore how the subscription industry overcame a lot of existing hurdles with AI-powered solutions.
Understanding the Subscription Management System
Numerous platforms have conquered the summit of success by offering software as a service. The introduction of the subscription management system has significantly boosted business growth by providing services to target customers and charging them on a recurring basis. You can charge a subscription fee on a monthly, quarterly, or yearly basis based on however you, as the merchant, would like to monitize your products and services.
A subscription management platform is critical, particularly if your customer base is large or scaling. An efficient subscription management system is expected to handle the following key functionalities in a flawless manner:
• Maintain accuracy in the billing process.
• Facilitate seamless payments
• Lifecycle management for subscriptions
• Customer management
• Analysis and reporting
• Churn prevention
A subscription management system can handle the processes of managing upgrades, required add-ons, cancellation, customer retention, and more. While subscription management companies keep evolving by upgrading their platforms to suit powerful solutions required by today’s SaaS businesses, AI was introduced to produce better results.. The introduction of artificial intelligence ended up being a significant milestone in the history of subscription management platforms!
AI in Subscription Management
According to McKinsey’s research, a 15-20% increase is seen in the profit returns of subscription management solutions after adapting AI to automate their functions. Consumers' increasing adoption of subscription platforms and services has urged businesses to remain vigilant about market trends. As people unanimously started towards convenience with a budget-conscious mindset, adaptation of AI in subscription platforms became inevitable. Here are a few ways artificial intelligence has made subscription services better in multiple aspects, keeping them relevant among consumers:
Personalized Recommendations
According to Forbes, 80% of customers tend to rely on subscription platforms that offer personalized services. AI solutions ignited the personalization power in subscription management systems by understanding individual customer choices that were bypassed even by complex data analytics algorithms. Rather than displaying random recommendations, AI made relevant, tailored solutions available for customers.
Even for the B2B subscription management market, AI helps focus on target customers to deliver tailored solutions. This has led to B2B companies gradually but exponentially adapting AI solutions to improve retention rates through the use of AI-generated recommendations.
Customer Segmentation
Customer segmentation plays a key role in offering focused solutions to their target customers. AI simplifies the process for subscription management companies, providing them with yet another reason to rely on AI solutions. Customer segmentation divides a company's customer base into distinct segments based on various factors, such as geographic locations and other similar characteristics.
A subscription management company might have an efficient data analytics team, but an AI solution can see through things an analyst would have missed. This encompasses various behavioral patterns, browsing information, and purchase history, providing valuable insights for customer segmentation. Based on this data, AI can segment the customer base into different groups, such as frequent purchasers, seasonal shoppers, etc.
Customer Lifecycle Management
Oftentimes, your customers may need a slight nudge in order to remain loyal to your subscription business. A strong relationship between a business and its customers is essential to keeping the market busy and generating steady profit. Only active customer lifecycle management, typically handled manually in traditional business models, can ensure this. But with AI, the dynamics change dramatically, boosting the overall efficiency of the process.
With AI solutions, a subscription management company can alert their users when they are nearing a subscription commencement/renewal rate with automated notifications. This helps the subscription business ensure that their customers don't lose interest after paying for a recurring subscription service.
Dealing with Customer Churn
Customer churn is one of the worst nightmares for a subscription management company. Continuous attempts are made in the business world to make sure their customer base stays stable while also working towards gaining new ones. AI provides some of the time-efficient and effective customer retention solutions to avoid unnecessary churns.
Certain AI tools can study customer behavior to understand the root cause of customer churn. By identifying the core reason for a company's repeated churn rate, appropriate measures can be taken to stop it. The AI tool can identify the most common reasons customers cancel a subscription, assisting businesses in resolving the issue. Automated dunning emails are another way an AI tool can adapt to stop involuntary churning. This mostly happens when a customer attempts to make a payment but it doesn’t go through. AI can trigger sending a notification email to the customer, nudging him/her to make a payment using alternate payment methods.
Generating Leads
AI-powered lead generation helps B2C and B2B organizations detect potential customers in an effective manner. AI boosts lead generation to a productive level with the help of predictive analysis, personalization, pattern identification, and more. After being implemented on websites/applications, AI chatbots can be used to capture potential lead information by enabling real-time conversation. A subscription management company can also plant AI tools for social listening—a process where AI tools can monitor the company’s presence on multiple social media platforms to identify potential leads.
Final Word
Talks, discussions and even rants are always on when the subject is AI. The reason for this perpetual buzz around the topic is that we yet to fully explore the full potential of this nascent technology. Will we ever? - That’s for the future to decide. As of now, AI keeps surprising the business world with ever-evolving possibilities. The integration of AI in the subscription management industry keeps this niche abuzz, too. Embracing AI offers multiple edges to a subscription management tool, making the producer-consumer bond reach new levels.
At saaslogic, we are committed to providing top-notch subscription services adhering to your personalized requirements. Connect with our team to explore our solutions and start your journey towards a churn-proof success!