“SaaS-based subscription businesses lose 20-30% of revenue to operational inefficiencies.”
- IDC SaaS, Subscription Business Platforms and Ecosystem Report - Jul 2022
The subscription economy challenges you with changing customer choices and an ever-expanding constellation of communication and content platforms populating your target customer’s mind. A rather inventive approach to gain that edge over your competition is to digitize and unify the underlying workflows and processes required for the smooth service execution. An optimized and well-engineered revenue management platform can enhance brand value and customer loyalty.
According to a recent McKinsey report, streamlining revenue operations to derive a much clearer ‘revenue versus cost curve’ propels higher customer retention and enables a free org-wide cash flow. The report further suggests that spending needs to align with realistic growth forecasts driven by upsell and cross-sell opportunities.
You built your business on merit, and what your subscription business deserves is much more than just a legacy revenue management system run by siloed business units and static data. Being the contemporary business leader that you are, you know you must streamline your revenue operations with a central billing ecosystem. You need to monetize what you’ve built.
Also known as RevOps, this unique amalgamation of money governance and execution tactics bridges your business's three critical moving pillars - marketing, sales, and customer management teams. The functional significance of RevOps becomes prominent when the principal revenue-generating levers are merged, measured, and analyzed to develop a holistic strategy influencing customer experience, retention, and even profitability.
Why is RevOps important for your business?
If churn and under-satisfactory retention rates impact your brand credibility, operational drawbacks in the revenue ecosystem impact your profitability. RevOps is critical to any growing subscription business because of the following reasons.
- Building an action plan for RevOps elevates customers’ payment experience, complementing their preferences. With better customer experiences come better brand credibility and improved customer loyalty. RevOps therefore improves your retention rates.
- As your subscription business matures, managing multiple service types, pricing options, and their billing complexity might become tedious for even experienced finance teams. The gap between the revenue-generating and revenue-managing functions of your business - marketing, sales, customer management, and finance teams should be bridged by a robust operations backbone. RevOps is just that!
- Your hard-won revenue leaks from a million crannies even if marketing and sales teams manage to onboard more customers but do not have an optimized revenue system.
A harmonious marriage between revenue and operations allows you to analyze the current pricing strategy, A/B test dynamic pricing tiers, and discover newer revenue streams as you scale up. RevOps helps shorten the accounts receivable cycle and enrich your product catalog with hybrid pricing models.
Hybrid pricing models combine the stability of fixed-revenue models like consistent subscription billing with the flexibility of usage-based and value-based pricing options. If your sales and marketing teams can gain visibility to your overall financial health, their approach to handling new customers is better. Simultaneously, your customer success teams can manage your existing customers intelligently with a data-driven approach.
Hybrid pricing options, in this case, are critical building blocks as these contribute to your offer management strategy, product roadmap, and customer lifetime value.
RevOps equips your finance teams with operational efficiency by implementing significant process optimizations. Some of such best practices include:
- Real-time visibility to revenue leaks and lost revenue pitfalls
- Reduced friction across sales, marketing, and revenue management teams
- A well-engineered pricing strategy designed by the brains of RevOps - marketing, sales, and customer management teams
- A streamlined revenue recovery and A/R collections process
- An agile and flexible payment experience
The Evergent Monetization Platform enhances the payment experience with the core billing functionality. Powering your platform with over 150 global currencies, Evergent expands the scope for newer revenue discovery and enables higher retention rates, eventually raising that bottom line for accelerated business growth.
To learn more about hybrid pricing models, mixed monetization, dynamic product pricing strategies, and much more on how Evergent can transform your platform with the right approach to RevOps, book a call with our monetization experts today.