The subscription business model has gone mainstream with

companies like Dropbox, Netflix, Adobe and Zipcar because

it offers a predictable, recurring revenue stream.

But in their eagerness to earn more revenue and keep up with

trends in global ecommerce, too many businesses want to

dive headfirst into the subscription commerce pool.

With so many subscription commerce solutions available, it can be easy to get

locked into a provider that doesn’t fit your specific requirements. Even worse, the

wrong solution can limit your capacity to respond to shifts in products/services,

pricing or market opportunities.

Commerce platforms not designed for the selling of digital

goods are unable to cater to the evolving business models

and specific features needed to sell digital goods and

services online. eBusiness firms with the constraints of an

ill-suited technology will lag behind customer needs, miss

out on monetizing digital content, and neglect launching new

product offerings1.

1 Market Overview: Commerce Solutions For Digital Products And Services, 2015” by Lily Varon, Peter Sheldon with Zia Daniell Wigder, Diana Gold, Forrester Research, Inc. May 27, 2015.

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Let’s evaluate the three different solution approaches for recurring billing and subscription businesses.

Already selling through an existing solution?

This could be a good time to reevaluate a billing solution because it’s likely that there may be areas lagging behind industry best practices.

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Category A – Billing/Payments Solution

A payment gateway provides the technology to securely capture and transfer credit card

information from a website shopping cart to the merchant account. A merchant account

handles the financial processing of the credit card transaction with the banks and card

brand (VISA, MasterCard, etc.). It is very typical to have one company supply the merchant

account and another supply the payment gateway because very few companies supply

both services under the same roof. Some payment gateways have even evolved to offer

simple recurring billing features.

Category A – Billing/Payments Solution

Typically the cheapest option to

get you up and running with

accepting basic recurring

payments

Get more pros and cons, plus use cases, in our complimentary white paper!

Subscription and recurring revenue

capabilities are not core

functionalities, which will require a lot

of custom development on your end

Pros Cons

Category B – Subscription Management Point Solution

Recurring billing and subscription management point solutions focus on the function of

managing when each customer is due to be billed and for how much. The vendor either

collects the annual/monthly fee or stops delivering the publication if the customer doesn’t

pay by a certain date. A recurring billing platform will manage this information for the

vendor, though they won’t necessarily act as the merchant of record and collect payments.

Category B – Subscription Management Point Solution

Can offer deep financial reporting

on your performance, tracking

important sales metrics such as #

of users, churn rate, etc.

Get more pros and cons, plus use cases, in our complimentary white paper!

The initial cost is often significantly

less than your final bill after adding in

all necessary costs for development

and other third-party vendor services.

Pros Cons

Category C – Full-Service or Integrated Solution

Full-service or integrated solutions have subscription management, but also core

commerce capabilities (e.g. payment processing, multivariate testing, localization

capabilities, marketing capabilities, fraud prevention, affiliate and reseller support,

customer support, etc.). The benefit of partnering with a full-service or integrated solution

is that they handle all of these activities on your behalf, freeing up numerous resources for

product development that would have been otherwise occupied by ecommerce and

subscription activities.

Category C – Full-Service or Integrated Solution

Enables you to go global fast with

new product or services releases,

because localization capabilities

are built in

Get more pros and cons, plus use cases, in our complimentary white paper!

Because more ecommerce and

subscription capabilities are built into the

solution, you may experience sticker shock

compared to the other types of solutions

Pros Cons

As you can see, each solution has their place and

serves different purposes.

The right solution will address your unique business needs and capabilities as well as the

needs of your customers who will be interacting with it. Analyze your business needs for

today and anticipate for tomorrow before evaluating providers to ensure the correct solution

is implemented. To help, we’ve included in the white paper some questions to think about

when it comes to your own business, as well as questions to consider asking potential

subscription solution providers.

Get subscription-savvy in our complimentary white paper!

cleverbridge provides global subscription billing solutions that help companies build long-term customer relationships and grow recurring revenue streams. With its flexible, cloud-based billing and monetization platform, cleverbridge integrates seamlessly with client systems, simplifies subscription business models and delivers an optimized online customer experience. Leveraging cleverbridge expertise, technology and services, clients monetize products and services more effectively, rapidly expand their global subscriber base and maximize customer lifetime value. Headquartered in Cologne, Germany, cleverbridge has offices in Chicago, San Francisco and Tokyo.

To learn more about cleverbridge, please contact inquiry@cleverbridge.com or visit www.cleverbridge.com.