Survey finds unhappiness in pricing and payment processes

Written by on November 16, 2015 in BillingViews, News with 0 Comments

Screaming man looking through a magnifying glassA new survey by Cerillion Technologies, a provider of billing, charging and customer management systems, polling the views of more than 200 senior decision-makers in organisations across EMEA, has found widespread unhappiness among businesses with their existing pricing and payment processes.

67 percent of respondents said there were drawbacks with their current approach, an alarming finding with many businesses adopting subscriptions and therefore crying out for agile systems and processes to help support their strategic shift.

“It’s just one blot on an otherwise positive subscriptions landscape painted by the survey,” says Louis Hall, CEO, Cerillion Technologies, “but it is a significant one. Over the long-term, the subscription revolution will depend on the success businesses have in implementing flexible pricing and payment strategies. For many businesses, delivering a greater range of choice is the key differentiator as they fight to win new customers; retain existing ones and build competitive edge.”

The urgency of this need is underlined by the steady growth in subscriptions that the survey highlights, as businesses strive for predictable recurring revenue streams to drive customer engagement. According to the findings, 69 percent of organisations are already generating some subscription revenue, with this figure set to reach 75 percent in three years’ time.

Today, the subscription revolution is primarily being fuelled by mid-sized organisations. Indeed, the survey reveals much greater adoption of subscriptions in companies with €11-50m (87 percent) and €51-200m (86 percent) in annual revenues, compared with 68 percent of companies with revenue over €200m and only 55 percent of companies with revenue less than €2m.

The direction of travel among all sizes of business, however, is clearly towards subscriptions. Underlining this, the survey shows a positive shift in the proportion of revenue generated through subscriptions with those earning more than half of their revenues in this way set to rise from 17 percent today to 35 percent three years from now.

This has led to a raft of new pricing strategies including bundling, usage-based pricing and pre-pay, as well as a growing trend for organisations to implement more flexible payment models both in terms of type and frequency of payment terms offered to customers. Already today, 74 percent of organisations offer more than one payment method, and 38% use four or more, showing that offering a choice of payment methods is crucial for many businesses, both in terms of addressing more customer segments and streamlining the flow of money into the business.

The survey also reveals interesting differences between countries in terms of preferred payment frequencies. Annual payments, for example, are by far the most popular option in the UK, used by 45 percent of respondents, whereas in France, monthly (50 percent) and quarterly (46 percent) are the preferred options.

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