Approaches to Subscription Billing Sponsored by Summary Results | January 2019

Survey Summary Between August and October, 2018, Gatepoint Research invited selected executives to participate in a survey themed Approaches to Subscription Billing. Candidates were invited via email and 100 executives have participated to date. Management levels represented are predominantly senior decision makers: 6% hold the title CxO, 37% are VPs, 56% are Directors, and 1% are Managers. Survey participants represent firms from a wide variety of industries including business and consumer services, financial services, healthcare, media, manufacturing (primary and high tech), public administration, retail and wholesale trade, telecom services, and transportation. Responders work for firms with a wide range of revenue levels: 23% work in Fortune 1000 companies with revenues over $1.5 billion; 13% work in Large firms whose revenues are between $500 million and $1.5 billion; 11% work in Mid-Market firms with $250 million to $500 million in revenues; 53% work in Small companies with less than $250 million in revenues. 100% of responders participated voluntarily; none were engaged using telemarketing.

Executive Overview As leading organizations make the shift to selling everything as-a-service, they are discovering that their legacy approach to billing is holding them back. Outdated systems built to bill one-time product purchases and services can’t keep pace with the scalability and increasing flexibility required for subscription and recurring billing. What are companies doing to modernize their billing platforms and lay the groundwork for success in monetizing new business models? This survey asks respondents to report: What type of billing system is currently in use, and do they have more than one? Are they troubled by the limitations of their current billing platform? What are the challenges they face? Can their billing system keep up with product innovation? Are they able to view lifecycle billing, subscription, discount and loyalty details real-time? What’s on their wish list of billing platform functionality? Are they considering an update to their billing platform?

How many billing systems do you operate and maintain? Nearly half of executives surveyed are juggling multiple billing systems, increasing the likelihood of both risk and cost while hampering the insights gained by a more unified customer view.

What type of system do you use for billing? Choose all that apply. 52% of respondents still rely on ERP-based billing, and nearly as many rely on spreadsheets, manual systems, and/or built their own system. Less than a third have invested in a dedicated commercial billing system. Limitations associated with these solutions are evident as those surveyed respond to the next question.

What are some of the challenges of your billing platform and system(s)? Business leaders reveal their most common pain point is dealing with systems built for an ERP-based, product-centric world rather than a customer-centric subscription and recurring model. Also vexing: inflexibility in supporting new offers, little support throughout the life cycle, and risk of revenue leakage and non-compliance.

Which of the following financial objectives is most important, relative to your monetization solution? Considering financial objectives in selecting a monetization solution, 47% of respondents primarily value predictability in their operating expenses. With that, they are looking to reduce professional services, and operating expenses in favor of capital expenses.  On the financial side, 47% of respondents say increasing their ability to predict operating expenses is of utmost importance. The rest of those surveyed identify professional services expense reduction (20%), or opex vs. capex reduction tradeoff as most important

What aspects of the customers' accounts can you view in real-time? Today’s real-time customers expect their service providers to have complete up-to-date information on all their activity. While most respondents can view current billing status, they lack the capabilities to view most other customer activity in real time.

What do you wish your current billing platform could do? Respondents demand capabilities that enable them to provide a superior customer experience and differentiate them from their competitors. Real-time balance management tops the wish list, followed by a number of flexible monetization features like rating on any metric, robust discounting, self-care, free trials, and loyalty points.

When do you expect to make a change to your billing platform? Nearly all respondents are either planning a billing platform change (45%) or open to considering a change (53%).

Profile of Responders: Industry Sectors Responders represent a wide variety of industries.

Profile of Responders: Revenue 23% of those surveyed work in Fortune 1000 companies with revenues over $1.5 billion.

Profile of Responders: Job Level 99% of those surveyed hold director or executive level positions in their organizations.

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