Businesses in nearly every industry are exploring ways to leverage the latest advancements in AI and automation to enhance their products and services.
We can see how the AI software market revenue worldwide is expected to reach US$126 billion by 2025, with a wide range of applications, including natural language processing, machine learning, and robotic process automation.
That’s quite generalized, so let’s drill down into the world of online shopping. A survey of consumers aimed to identify how they believe AI will improve online shopping, with 50% indicating price comparison, 46% finding deals, and 41% relevant offerings.
So, how might Artificial Intelligence (AI), Machine Learning (ML), and intelligent automation affect subscription billing businesses? Everything from SaaS platforms to monthly boxes of curated goods can benefit from these technologies as they evolve.
Let’s start by exploring why we think the subscription and recurring billing business model is primed to benefit from the rise of AI and ML. We’ll start by exploring what’s currently possible and what the future may hold.
Processing subscriptions can be time-intensive and subject to human error if handled manually, as this process includes sign-ups, initial billing, account setup, and sometimes shipping products.
Fortunately, advanced subscription billing platforms have introduced valuable tools and automation capabilities to streamline processes. Several critical yet mundane tasks can already be automated to reduce the workloads and improve accuracy.
However, there are still some problems for recurring billing businesses — and the future of Artificial Intelligence (AI) and Machine Learning (ML) may be the solution. Any recurring billing business can potentially benefit from advanced tools as they emerge, including businesses such as SaaS or monthly boxes.
Subscription businesses thrive on loyal, recurring customers. Retaining customers involves effective processes at every step, from billing to shipping to customer services. Dropping the ball in any of these areas can cause a customer to cancel, and if that happens often enough, your business may stagnate or even decline.
Let’s explore the top benefits and use cases for leveraging AI in a recurring subscription business.
Automation has already allowed organizations to become more efficient throughout. Now, as intelligent automation and other AI applications emerge, a new era of efficiency is right around the corner.
Currently, automation tools can handle mundane tasks with high accuracy. As advanced technologies evolve, the level of complexity will also evolve to take on multi-step workflows.
Additionally, AI can take on fraud detection, data validation, and quality assurance with minimal human involvement. These future applications allow human counterparts to focus on higher-impact tasks to grow the business more effectively.
Reducing churn is a foundational practice for building a successful subscription business. At the same time, AI excels at analyzing data and finding subtle patterns that human analysts may overlook.
Combined, an effective AI model can evaluate historical data and then create predictive models estimating churn rates. You can then use these predictive models to adjust specific efforts to retain customers and reduce churn because you’ll have deeper insights int why people are leaving.
Depending on the specific tool, churn prediction may also give you specific insights about how to keep customers from cancelling. If you can conduct exit surveys or otherwise identify the source cancellation, the right platform can aggregate and evaluate this mountain of data to identify what changes will keep customers loyal.
Recurring businesses can significantly benefit from advanced personalization capabilities. Relatively simple personalization, such as using someone’s name when possible instead of something generic, has already boosted customer experiences.
Now, as AI and ML continue to mature, we’re on the horizon of an entirely new era of personalization so your product or service can speak to customers on a much deeper level. Additionally, personalization can also lead to better engagement to keep customers happy and retained.
For example, future tools may use all available data to better curate subscription boxes or make suggestions about SaaS capabilities that are not being utilized. Effectively using what you know about each customer and other customers like them can increase loyalty and engagement.
Recurring businesses can incur heavy losses if they’re unable to detect fraud before transactions are processed. Having chargebacks or disputes after products ship or service is provided can significantly affect your bottom line.
There is a range of fraud detection tools available for many billing platforms, including Vizibill, and AI is paving the way for a new era of increasingly sophisticated fraud detection and prevention tools.
Future tools will likely be equipped to make sense of a broader range of data points about new and existing customers to identify fraud. These AI models would be trained on a wealth of historical data about authentic and fraudulent transactions to help identify any nuanced differences that may indicate fraud.
How much should you charge? This question is infamously challenging for new and established businesses alike. Are you charging too much and losing potential customers, or charging too little and cutting into profits?
Advanced pricing optimization tools have the potential to help businesses answer these questions by aggregating and evaluating data from across the industry. From there, you’ll have a better understanding of the optimal pricing strategy for your organization.
Similar tools may also enable dynamic pricing based on overall market conditions. However, for subscription-based services, dynamic pricing may be a hindrance if not implemented correctly. Customers expect reliable prices and may cancel if they see new customers are receiving a better deal.
Operating a recurring business has unique challenges when compared to other business models. Processing payments or sending invoices must be made accurately and precisely on time, or customers may end up looking elsewhere.
Vizibill offers an industry-leading billing platform designed for the needs of recurring businesses. We currently offer advanced automation and are exploring how to expand our capabilities as AI is on the horizon.
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