Beyond SaaS: The Surprising Industries Embracing Subscription Billing
Introduction:
When you think of **subscription billing**, **software-as-a-service (SaaS)** is likely the first industry that comes to mind. However, the subscription model is no longer limited to SaaS or digital services. Today, an increasing number of **traditional industries**—from manufacturing to healthcare and even utilities—are adopting subscription billing to create recurring revenue streams, foster customer loyalty, and provide more flexible service offerings. But transitioning to this model brings its own set of challenges, especially for businesses not traditionally accustomed to recurring billing.
In this article, we’ll explore the surprising industries that are embracing subscription billing and the challenges they face. We’ll also highlight how **Emersion’s versatile platform** supports these industries in making the transition smoothly and efficiently.
The Rise of Subscription Billing in Traditional Industries
While subscription billing has long been the domain of SaaS companies, many **traditional industries** are now realising the benefits of recurring revenue models. These industries are using subscription billing to offer everything from product-as-a-service to ongoing maintenance, making their services more accessible and sustainable. Here are some industries that are adopting the subscription model:
1. Manufacturing
The **manufacturing industry** is embracing subscription billing for services like equipment maintenance, software updates, and consumable replenishments. Rather than selling products as a one-time transaction, manufacturers are offering long-term service packages that include regular maintenance, monitoring, and upgrades on a subscription basis.
Example: A heavy machinery manufacturer might offer a subscription plan for ongoing equipment inspections, maintenance, and repairs, providing clients with peace of mind and reducing the need for emergency services.
2. Healthcare
**Healthcare providers** are adopting subscription models for telemedicine, health monitoring services, and medical equipment leasing. Patients can subscribe to services that include ongoing consultations, remote monitoring, or access to medical equipment as part of a regular payment plan.
Example: A healthcare provider could offer a subscription plan for remote patient monitoring, where patients receive devices and regular health data monitoring from professionals for a fixed monthly fee.
3. Utilities
**Utility companies** are shifting toward subscription billing to offer energy services, smart home technology, and energy monitoring as part of bundled service packages. Customers subscribe to a set of services that go beyond traditional electricity or water supply, including energy efficiency consultations and smart device management.
Example: A utility company may offer a subscription for a smart home energy management system, allowing customers to control and monitor their energy usage while receiving monthly energy efficiency reports.
4. Retail and Consumer Goods
**Retailers** are increasingly offering subscription-based services for consumables and luxury goods. Whether it’s a subscription box for skincare products or a monthly delivery of household essentials, retailers are finding ways to create consistent, recurring revenue streams.
Example: A subscription service for high-end cosmetics, where customers receive curated beauty products every month, personalised to their preferences.
5. Automotive and Transportation
The **automotive industry** is exploring subscription services for car maintenance, car-sharing platforms, and even vehicle leasing. Customers subscribe to these services instead of purchasing a vehicle outright, which allows for flexible access to transportation without the long-term commitment of ownership.
Example: Car manufacturers or rental companies may offer subscription services where customers pay a monthly fee to access a vehicle of their choice, with maintenance and insurance included.
Challenges in Transitioning to Subscription Billing
While subscription billing offers tremendous opportunities, the transition can be challenging for traditional industries not accustomed to recurring revenue models. Here are some of the common challenges they face:
1. Adjusting to Recurring Revenue Models
For businesses that have traditionally relied on one-time sales, shifting to a **recurring revenue model** requires a significant change in financial forecasting and cash flow management. Instead of receiving large, upfront payments, businesses must adjust to a steady, smaller revenue stream over time.
Challenge: Managing cash flow and forecasting accurately can be difficult as businesses transition from one-time transactions to subscription models.
2. Managing Multiple Subscription Tiers and Pricing
Offering **different subscription tiers and pricing models** adds complexity to the billing process. Businesses need to manage various pricing options, such as monthly vs. annual billing, tiered service levels, and usage-based pricing. Keeping track of all these variables can be overwhelming without the right systems in place.
Challenge: Businesses may struggle to manage and optimise multiple pricing structures and subscription tiers without automation.
3. Handling Recurring Payments and Billing Cycles
Recurring payments require businesses to manage **billing cycles, payment retries**, and failed payments. Traditional industries that are new to subscriptions may not be equipped to handle these processes efficiently, leading to billing errors, missed payments, and customer churn.
Challenge: Without proper dunning management and automated billing, businesses can experience revenue leakage due to payment failures.
4. Ensuring Compliance with Tax and Regulatory Requirements
Subscription billing often involves complex **tax compliance** and regulatory requirements, especially for businesses operating across different regions or industries. Staying compliant with local tax laws, managing VAT or GST, and handling industry-specific regulations can create additional challenges.
Challenge: Managing tax compliance for recurring billing requires specialised tools to avoid penalties and ensure accurate invoicing.
How Emersion Supports Industries Transitioning to Subscription Billing
Emersion’s platform is designed to support a wide range of industries as they transition to subscription-based models. With flexible, scalable features, Emersion simplifies the complexities of subscription billing and helps businesses overcome the challenges mentioned above. Here’s how Emersion helps:
1. Flexible Subscription Management
Emersion allows businesses to easily create and manage **multiple subscription tiers, pricing models**, and billing cycles. Whether offering monthly, annual, or usage-based pricing, businesses can customise their billing structures to suit their needs while ensuring accuracy and transparency in invoicing.
Benefit: Businesses can offer diverse subscription plans and pricing options without the administrative burden, allowing them to scale efficiently.
2. Automated Billing and Payment Processing
With Emersion, businesses can automate **recurring billing cycles**, ensuring that payments are processed on time, every time. The platform also handles payment retries, reducing involuntary churn and revenue leakage from failed payments. Automated reminders keep customers informed about upcoming payments and renewals.
Benefit: Emersion’s automated billing system reduces errors and ensures timely payments, helping businesses maintain consistent revenue streams.
3. Dunning Management and Payment Recovery
Emersion’s sophisticated **dunning management** features help businesses recover failed payments by automatically retrying transactions and sending reminders to customers. This significantly reduces involuntary churn and helps businesses retain their subscribers even when payment issues arise.
Benefit: Effective dunning management protects businesses from revenue loss due to missed payments and improves customer retention.
4. Tax Compliance and Regulatory Support
Emersion’s platform simplifies **tax compliance** by automating tax calculations and ensuring that the correct VAT, GST, or other taxes are applied to each transaction. The platform supports businesses in managing regulatory requirements, helping them stay compliant across different regions and industries.
Benefit: Automated tax compliance reduces the risk of penalties and ensures accurate invoicing across multiple regions.
Why Subscription Billing is Here to Stay
Subscription billing offers traditional industries a powerful way to diversify their revenue streams, create predictable income, and build stronger relationships with customers. As industries from healthcare to manufacturing embrace the subscription model, they are discovering new ways to deliver value to customers while ensuring long-term business sustainability.
With the right tools and support, transitioning to a subscription model doesn’t have to be overwhelming. Emersion’s versatile platform provides the automation, flexibility, and scalability businesses need to manage subscription billing efficiently and effectively, no matter their industry.
Questions for the Reader:
- Is your industry exploring the benefits of subscription billing?
- Are you prepared to handle the complexities of managing multiple subscription tiers and pricing models?
- Could automating your billing processes reduce revenue leakage and improve customer retention?
- Are you confident that your subscription billing system complies with tax and regulatory requirements?
Call-to-Action:
Ready to transition your business to a subscription model? Emersion’s billing automation platform supports diverse industries in managing subscriptions, pricing models, and compliance efficiently.
Contact us today to learn how Emersion can help your business embrace subscription billing and streamline your operations.
