Seven Sins of Subscription Billing

Seven Sins of Subscription Billing
Steve Adams – CEO

March 28, 2013 1

Speaker Introduction

Steve Adams, CEO
stevea@fusebill.com

www.fusebill.com
Thursday, March 28, 2013 2
Call Us at: 1-888-519-1425 Copyright Fusebill Inc. 2013. All rights reserved

Agenda

1. Billing for the subscription economy is challenging

2. Seven Sins of Subscription Billing

3. Fusebill Introduction

www.fusebill.com
March 28, 2013 3

Key Takeaways

• Think about your current and future needs

• No ‘one size fits all’ solutions

• The Biblical 7 sins are more interesting than the billing sins…

www.fusebill.com
March 28, 2013 4

BILLING IN A SUBSCRIPTION
WORLD
www.fusebill.com
March 28, 2013 5

Fusebill Introduction
Fusebill automates
invoicing, billing and
collections for subscription
based companies.

We pride ourselves on our
customer support and
service.

We measure our success by
our customer’s success.

www.fusebill.com
March 28, 2013 6

Subscription Economy Overview

It’s no longer about selling a product
one at a time, but about offering a
service.

No matter what your
industry, subscriptions are growing by
leaps and bounds.

Forrester Research predicts by 2016
subscription licensing models will reach
50% of the total software license
market.

www.fusebill.com
March 28, 2013 7

Billing Service Overview

Automated Billing for Subscription Based
Companies:

• Recurring billing and payment solutions,
• Invoicing and credit card collections,
• Real-time visibility to key subscription
metrics

For businesses with products or services
billed on a recurring bases, a billing
service:

• Reduce costs,
• Improve customer response times,
• Streamline operations

www.fusebill.com
March 28, 2013 8

Transactional back office systems fail

Recurring Billing

Initial Sales
Process Renew Upsell Multiple
Concurrent
Subscriptions

Cross- Usage Based
sell Charges

Traditional transactional systems
don’t support recurring Credit Card
Expiry, Fraud, etc.
9

www.fusebill.com

The Seven Sins

1. Rely on a gateway
2. Do-it-yourself systems
3. Ignore Security and PCI Compliance
4. No Product Catalog
5. Limited scope and scale
6. Revenue sharing with your vendor
7. Insufficient Support and Engagement

www.fusebill.com
10

Sin #1 – Rely on a Gateway

• Payment Gateways are needed to process credit cards online
– Authorize.net, Beanstream, Chase, Moneris etc.

• Fusebill integrates with over 30 gateways…

• Most have added basic ‘recurring billing’ capabilities

• Easiest solution for a raw startup

www.fusebill.com
March 28, 2013 11

Payment Gateways Limitations

• Billing intelligence: Gateways process
charges – don’t determine amounts Taxes
Coupons Pro-rating

• Manage Customers, not transactions Discounts Add-ons

• Reduce credit card declines and
chargebacks Price Plan Free Trials

• Data portability Price
• Insights to subscription business via
reporting and analytics

www.fusebill.com
March 28, 2013 12

Sin #2 - DIY Billing Systems

• Startups and Development shops are often tempted to build

• Why is it tempting?
– Everyone starts with a simple pricing model
– Using existing resources – ‘Free’
– How hard can it be?

www.fusebill.com
March 28, 2013 13

“Just” bill by credit card

PCI
Security Fraud
Compliance

Card Expiry Declines Chargebacks

Fees Volume Prorating

Chargebacks

www.fusebill.com
14

DIY Billing becomes Bottleneck
Resource battles: By automating our billing
• Core product takes priority
• Sales, marketing, finance take with Fusebill, we’ve freed
backseat up our sales and
development team to
Manual Processes are band-aids. focus on our business
Mélanie Attia, e-signlive
Internal demands ignored until
critical.

www.fusebill.com
15

Sin #3 – Ignore Security & PCI

• PCI – security and process requirements driven by credit cards

• Protecting billing data from:
– External risks – hacking, theft, disclosure
– Internal risks - misplaced drives, backups, agent access

• Downside?
– Business risk – client data disclosure
– Unable to process credit cards

www.fusebill.com
16

Sin #4 – No Product Catalog

• Some invoicing systems (Freshbooks, Quickbooks) let you
define an invoice and set it to recur.

www.fusebill.com
March 28, 2013 17

2 @ $100 BasicBasic
2 @ $100
2 @ 2 @ $100
$100 Client AA
Client
2 @ $100
2 @ $100
2 @ $100

2 @ $100 Premium
2 @ $100
2 @ $100 Client B
2 @ $100
2 @ $100
2 @ $200

www.fusebill.com
March 28, 2013 18

2 @ $100 Basic
2 @ $100
2 @ $100 Client A
2 @ $100
2 @ $100
2 @ $100

2 @ $100 Premium
2 @ $100
2 @ $100 Client B
2 @ $100
2 @ $100
2 @ $200

• Clients are setup individually (and manually)
• Can’t answer ‘how many clients are on the basic plan’
• Can’t change the price easily
• Can’t upsell/change with pro-rating

www.fusebill.com
March 28, 2013 19

Product Catalog Needs

• Define / configure products Ask:
– One-time fees • Can I support my price
– Recurring plans?
• Can I report properly?
– Volume / users • What happens when:
• My pricing changes
• Define pricing options • I have a promotion
– Recurrence frequency • I have a new product
– Coupons
– Discounts
– Trial periods
– Apply taxes?

www.fusebill.com
March 28, 2013 20

Sin #5 – Don’t address complexity and scale
Multi Pricing complexity grows
Product exponentially:
• Product proliferation
• Currencies
Price • Channels
Models • Promotions
Simple • Sales models
Pricing
Price Manual Processes become error
Points prone

Invoicing

By automating our billing with Fusebill, we’ve freed up our sales and
development team to focus on our business. - Mélanie Attia
www.fusebill.com
21

Issues of Scale

• Need for automation increases as customer base grows
– New Orders
– Customer calls
– Collections – and collection failures

• Drive toward customer self-service
– Ordering
– Manage credit cards, renewals, billing questions

• Integrate to related systems
– CRM, Accounting

www.fusebill.com
March 28, 2013 22

Sin # 6 – Revenue Sharing

• Many services base their pricing on your revenues (e.g. 2%)
Online Payment –
Ordering Rating Generation Delivery
presentation Collection

Billing Cost $0.20 Billing Cost $2000

It shouldn’t cost more to use bigger numbers on the invoice!

www.fusebill.com
23

Sin #7 – Insufficient Engagement & Support

• Big or small, there are complexities and quirks in all billing
processes

• Most people (and companies) don’t have experience buying
billing systems

• Vendors should actively help:
– Understand your own needs
– Show how systems meet your needs
– Help implement, migrate clients

www.fusebill.com
March 28, 2013 24

Fusebill Executive Dashboard

www.fusebill.com
March 28, 2013 25

Track Lifetime Value, Churn

www.fusebill.com
March 28, 2013 26

Fusebill Platform Overview

Self-
Online Swipe & Agent Lifecycle
Service Analytics
Checkout Subscribe Interface Management
Portal

API Layer – Customers, Subscriptions, Transactions

Pricing Accounts Billing Invoicing Payments
Products Subscriptions Rating Payment Credit Card
Price Plans Invoices Usage Volumes Terms Date ACH
Usage Tiers Ledgers Pro-rating Control Storage Vault
Discounts Reseller Taxation Review, Edit Gateways
Coupons Tracking Coupons Aging Dunning
Payments Currency Adjustments Retries
Adjustments Adjustments

Scalable Multi-Tenant PCI Compliant Security

External Payment Processing

www.fusebill.com
March 28, 2013 27

Questions or Ideas?

Visit www.fusebill.com
Call me 1-888-519-1425

28

Seven Sins of Subscription Billing

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