The subscription economy continues to be on a healthy growth trajectory with nearly half (46%) of Australian businesses planning investments in global expansion to reach new customers over the next 12 months, according to a new report from financial infrastructure platform for businesses, Stripe.
Despite these plans, the new Billing report shows almost three-quarters (73%) of business leaders doubt their current billing systems can support their international growth strategy effectively. Consequently, many are considering reassessment of their billing software to facilitate global scalability.
The majority of local subscription businesses also plan to experiment with more flexible subscription plans in the future. For example, by enabling usage-based billing (78%). However, existing billing systems often lack the flexibility to support these creative pricing strategies.
The new Billing report also reveals that involuntary churn remains a persistent issue for subscription businesses. Involuntary churn occurs when a subscription ends involuntarily – for example, because of failed payments due to expired credit cards. Despite 47% of Australian businesses experiencing an uptick in involuntary churn over the past year, many lack comprehensive data to quantify revenue loss. 42% of businesses cannot quantify the revenue impact from churn or payment failures.
Stripe Australia and New Zealand managing director, Karl Durrance said, “Reducing customer churn should be on every business leader’s agenda: it’s cheaper than acquiring new customers and an effective way to maximise revenue and increase customer lifetime value. We hope businesses find this report and Stripe’s revenue recovery features a useful foundation.”
Stripe launched Stripe Billing in 2018 to help companies manage hundreds of millions of billing relationships with customers by making it easy to set up billing plans, customise pricing logic, calculate amounts owed, preview upcoming invoices, apply discounts, send payment reminders, track payments and more. Stripe Billing supports a wide range of pricing models including one-off transactions, sales-based contracts, tiered pricing, and usage-based pricing.