August 24, 2016
CNP Expo: The Subscription Prescription
May 19, 2015
The subscription model continued to be a hot topic on the first full day of the CNP Expo in Orlando, Fla. After figuring prominently in two keynote addresses to start the day, a dedicated panel discussed recurring billing at a late morning session on Tuesday. The steady revenue streams are desirable, panelists said, but creating and maintaining them has become more complex. Despite that, over the past five years, subscriptions have exploded in popularity.
“Technology has caught up with delivery models consumers are willing to pay for,” Dan Burkhart CEO of subscription-billing technology provider Recurly said while moderating the discussion.
Now customers can update their purchasing options online, which makes subscriptions more convenient.
“This is a powerful concept,” Burkhart said.
Panelists acknowledged that Netflix was the company that really opened the door to monthly charges for goods and services. Since then, however, challenges to the smooth collecting of subscriptions “have gotten exponentially worse,” according to Melanie Stout Manuel of Paul Larsen Consulting.
A major challenge for companies that want to leverage the model is with international customers. Different markets require a diversity in security efforts.
“When you have a number of customers throughout the world, one solution might not be the silver bullet,” said Derek Blatter, senior manager of electronic payments and fraud prevention at Ancestry.com. Blatter also addressed the problem of churn, which Rent The Runway’s Jenny Fleiss in one of the morning keynotes had identified as an issue for their subscription programs. Blatter agreed, and said to combat the problem, Ancestry.com has “taken on more complexity.”
The company also carefully monitors the payment rate and tries to save customers rather than stop doing business with them, Blatter said. Ancestry.com has its own billing engine and studies consumer accounts to determine which ones are connected to fraud.