One of the big differences between B2C and B2B e-commerce is that most B2C business is based on a one-off transaction with upfront payment.
\On the other hand, B2B transactions often lead to a continuing relationship between B2B e-commerce companies and their buyers.
While one-off purchases are not at all unusual in the B2B market because of the larger volume of products and greater finances involved, businesses prefer to stick to a supplier that they have extensively researched and established trust with.
As a result, a subscription model of business makes a lot of sense in the B2B e-commerce market.
With Salesforce, you can easily implement a subscription system for your B2B e-commerce sales using the CPQ software of Salesforce.
Salesforce CPQ software is a great way to take complications out of subscription business operations.
Unlike single independent transactions, subscriptions have a greater and more long-lasting effect on the customer lifetime value.
This, in turn, can have a huge effect on the revenue and profit of your business in the long run.
Since Salesforce software architecture is primarily based on CRM, this also makes it easier to get an even more in-depth view of your customer and offer better product suggestions that both you and your client can benefit from.
Benefits of The Subscription Model in B2B E-commerce Growth
In a B2B business, a subscription business model can impart multiple benefits in helping the business grow and reach its full potential.
- By using a subscription model, you create a channel for recurring revenue, which increases overall earnings. It is costlier to keep searching for new clients to increase your business than to retain and serve old ones, especially in B2B e-commerce marketing.
In fact, a survey done by CFO Research along with Salesforce of senior finance executives revealed that 40% of the revenue of the organization that 53% of the respondents worked in, came from recurring sources.
- Subscription-based recurring income also guarantees better chances of growth and expansion in the future due to continued cash
Research by Manifesto Growth Architects shows that 70% of businesses believe that membership-based business models will play a major role in driving business in the future.
- By automating business using a subscription system, where payments are self-executed with the client’s permission and according to pre-decided terms, sales representatives are freed up to do more important tasks. They can concentrate on clinching deals rather than finalizing orders from a client who already knows what they need, taking over only when a complication or conflict arises.
- Even clients feel less burdened with the idea of ordering and reordering and all the complexities involved with closing a contract when the whole process can be automated using subscriptions.
By just defining the terms and requirements of their order once or changing a few details if needed, a client can be rid of the burdensome process of going through the purchase every single time.
- Subscriptions also increase the customer lifetime value of each client who signs up. This does wonders for the return on investment. Not only that but it also decreases the churn rate for two reasons.
First, having a subscription makes the client think twice before canceling and they often end up simply changing the terms to suit their current needs instead of canceling outright.
Second, this gives a chance for sales representatives to upsell or cross-sell products or offer discounts and premium content to appease and retain their customers.
- Subscriptions also help reduce errors in orders that could end up being costly to the B2B business. By using suitable tools that automate the process of CPQ for B2B subscriptions, the chances of human error is significantly brought down. This can have a huge impact, especially for startups and small businesses in which a smaller workforce can get overloaded during peak sales or growth.
By effectively investing in proper small business e-commerce solutions for subscription billing, they can quote subscriptions with CPQ software just the first time or when the client wants to modify some terms, and thus eliminate avoidable errors almost entirely.
How Salesforce B2B E-commerce CPQ Software Helps Streamline Subscription Solutions
Salesforce software solutions have always been a cut above the rest, especially when it comes to B2B e-commerce software. Being primarily a CRM service provider, it is but natural that a versatile CPQ solution would be a part of the Salesforce Software-as-a-Service offerings.
Salesforce CPQ and Billing can optimize all your quoting and invoicing needs, especially when used in conjunction with other Salesforce B2B commerce tools. It has just the right B2B e-commerce features to automate the process of subscription and usage billing needs for your Salesforce storefront. Here is how it gets that done.
1. You get an out-of-the-box solution to go with the rest of your Salesforce
If you already use the Salesforce customer relationship management software, using a native solution like Salesforce CPQ will eliminate many syncing and integration hassles.
If you have needs that Salesforce cannot solve natively, you can still look for options in the Salesforce AppExchange, which is like a B2B e-commerce marketplace for apps and services, without needing to verify integration and security issues.
Whether you need accounting software integration with Salesforce or want inventory management software, Salesforce AppExchange will have it.
Thus, instead of wasting time on ratifying a third-party API or on the Salesforce software development life cycle by creating your own solution, you can get directly to kickstarting your subscription business model.
2. The advantage of Salesforce automation is extended to subscription billing.
Everyone is looking for automation in every field. This goes for subscriptions as well. Besides being a billing and quoting software, Salesforce CPQ also has the necessary tools for subscription and usage-based models of business.
It automates the process of subscription renewals and amendments without the need for too much human intervention.
This makes the process easier for both the client and the B2B business, freeing up their precious time and resources for more important needs. Errors are reduced, complexities eliminated, repetitions avoided, and scaling expedited.
3. A variety of plans and schemes are possible using the software.
A subscription is not as simple as a single plan with a single price. This is especially true in B2B deliverables.
There are free trials, premium offerings, add-ons, setup and onboarding charges, complex enterprise quotes, discounts and offers, refunds, compensations, renewals, and many more.
The greater the size of the transaction, the greater is the scope for complicated contracts.
But the subscription management tools in the Salesforce quoting software makes all of these possible in an easy and simple manner with a unified view.
4. You can offer customers greater flexibility and personalization in the plan they adopt.
Managing plans and prices can be difficult for the client too. There are so many things to decide, like billing frequency, products, invoice format, payout channel, and so on.
Moreover, a client might want to change a term or condition in the recurring contract.
Salesforce invoicing is made easy with the CPQ software. No matter what the customer needs or how they want their invoices to be made, Salesforce CPQ has the functionality to allow you to do that in accordance with the rules and purchase conditions that you have pre-fixed.
5. You get a high level of freedom and control over the products you offer.
If the customer has to understand the scheme of the subscription plans you offer, you must make it clear and error-free in your B2B e-commerce portal yourself.
Moreover, to scale your business, you may sometimes need to change the terms of the plans you provide.
Since a subscription leaves a long trail, a single discrepancy can effectively introduce a major mismatch in the entire chain.
But Salesforce CPQ makes it easy to keep track of all your subscription plans and make any upgrades, downgrades, or pro-rata changes in accordance with your set rules and business goals.
By making all calculations automatic, you don’t need to implement changes manually at each point.
6. Data obtained from the CPQ software is incorporated automatically into the CRM Salesforce software.
The Salesforce B2B e-commerce platform automatically transports customer data made available from the CPQ software to the analytics module of the salesforce.com CRM software.
Subscriptions maintain long-term customer relationships and data gathered from here can give important insight into the behavior and needs of the client.
This gives a chance to serve the client better and introduce them to offers and upgrades at the right time and with the right strategy.
How to Create a Salesforce Subscription Product on CPQ
Creating the perfect Salesforce B2B Commerce Subscription Storefront is essential to running a successful B2B subscription business.
By freeing up your time and effort on the customer retention front and allowing Salesforce CPQ to take over, you can expend more on lead prospecting in your B2B business with Salesforce and growing it to the full potential it is capable of achieving.