Quick. How much do you think you are spending on all those software subscriptions to keep your business running?
At first glance, it may not look like a whole lot. But, if you diligently add them up from all your card statements plus all the money you reimburse your team towards subscription cost, you will see that is more than what you first thought.
A rapidly growing SaaS software ecosystem also means you are steadily spending more on buying software subscriptions for many new aspects of your business.
If you are a small business, you want to ensure that a monthly subscription for marketing tools here, and another one for your CRM there, do not go wasted. You want to stop paying the moment you or your team members no longer need any of your subscriptions.
If you are a startup, wasting money on unused subscriptions is even more painful. It is money that you could very well spend on something else useful for your teams.
Bottom line - you are wasting more money on subscriptions than you think.
If you are not sure, read on.
More than one of the tips below will make you pause and take a mental note to avoid similar future scenarios.
1. Buy subscriptions exactly when you need them. Never too soon.
Every business requires different tools at different points in time. So, it would be best if you always timed your purchases in alignment with your business requirements. Remember, until you actively start using, the subscription is just lying around, and the monthly amount is just going down the drain.
Never subscribe to anything without keeping note of it in a prominent place that you can recall later. You will keep paying for such untracked subscriptions for a long time (after the sneaky TRIAL period gets over) unless these entries catch your attention in your credit card statements.
2. Go for free versions as much as possible. Free does not mean it is not good.
Remember, there is always heavy competition amongst all SaaS companies across all sectors.
A well-established vendor will keep a lot of features free to push back new competitors. At the same time, new players will give away a lot for free to acquire new customers and grow.
You should learn how to use these market dynamics and stick to free versions as long as possible until your business truly outgrows them and badly needs paid premium features.
One word of caution. In many SaaS products, switching can sometimes be painful. Play the "free version" game based on actual switching costs or efforts required.
3. Detect and get rid of duplicate subscriptions in the same category.
When you have a slightly larger team of employees and give them the freedom to choose any subscription they want to use, the problem of redundant subscription kicks in.
Everybody has their tool preferences based on features, usability, or plain simple familiarity. There is nothing wrong with that.
But, that is going to make tracking these subscriptions quite harder for you. When team members stop using a tool, they will hardly let you know unless you ask them.
For all the subscriptions you are ultimately paying for, ask your teams why they have to use different vendors for the same category. Iron them out, explain why you prefer to avoid multiple subscriptions.
4. Systematically plan and get rid of subscriptions you no longer need.
Let's say you have spotted a subscription you may no longer need.
The next step of canceling it may be challenging. Especially if you think someone in your team might need it or if it might affect your business.
Remember that the effort you put in to cancel it is worth it. You are not only saving that month's payment, but you are also arresting all future cash outflows that have NO end date.
Think what the above statement means - one more time.
If there is no business risk, sometimes it makes sense to pause the subscription and see if anyone comes screaming in search of the missing subscription.
5. Think twice before paying for those premium features.
The subscription model makes it possible for the vendors to charge customers different amounts based on the feature sets they use.
Usually, they keep the standard set of features at the lowest possible cost (to acquire customers) and then start charging steeply for additional features.
Ask yourself and your team how important are those premium features for your business. Is someone really using it? Is your business deriving any benefit from those features?
Downgrade any subscription where the ROI is not clear on the premium features that you are paying.
6. Set aside some time every month/quarter to do detailed research on all your subscriptions.
Here again, the dynamic nature of the SaaS industry makes it almost a must for you to review your toolsets continually.
There will always be a better product with killer features and lower prices that will make your current subscription look outdated.
Switching vendors is not easy and also not advisable in some cases. But, wherever possible, go for it.
Also, keep an eye on the overall health of your vendors. Sometimes the vendor stops growing and just sit around cashing in on the existing business without increasing the product features. If they are early-stage startup vendors, check for their funding round in the last one year. That sometimes is a good indication of their future.
7. Get comfortable downgrading and upgrading whenever required.
One of the significant advantages of buying software in the SaaS model is that you start/stop your subscription, upgrade/downgrade whenever you want.
Many buyers don't look at this way and feel obligated to keep paying for the same plan forever.
Spend some time to study their feature tiers, and align your subscriptions to your business need. If you don't need a subscription for the next six months, and there is no hassle in starting again by adding data anew, then, by all means, cancel and re-subscribe later.
Many vendors have a free tier that will not be visible to you. They would hate to see you go. Chat with them or send an email, and they will be more than happy to keep you in the platform, on a free plan, till you are ready to start paying.
8. Every bank/card statement is a surprise if you can't forecast your spending.
SaaS products can be purchased in many different frequencies, though monthly and annual plans are preferred by many.
A combination of all these payment frequencies will make the prediction of your monthly outflows very difficult.
There is no shortcut to solving this problem unless you have built a simple forecasting system for yourself, using a spreadsheet or any other means.
Here's a simple hack. Login into every subscription product you have, go to the billing section, and note the next billing date. Create entries for these dates in your most frequently used calendar (mac or windows). At the very least, the renewal dates will not go out of your sight.
9. Avoid using multiple Accounts/credit cards to purchase subscriptions.
If you have set different credit cards for multiple recurring subscriptions, tracking them will be a nightmare.
When it comes to subscriptions, you should always be able to "follow the money.”
Spend some time to see if you can switch all recurring payments to just one card or two at the max. After that, make it a habit to skim monthly card statements to see if any subscription charge is disputable or no longer required.
In short, a lot of things boil down to building a systematic approach that suits your situation. This is where a good subscription management tool fits into your overall strategy.
Here's a simple 4-step process to get started on consolidating your subscriptions:
a) Open a blank spreadsheet. Note down subscription names that you can remember right away.
b) Scan your web browser history or bookmarks to locate some more. Check your mobile apps list too.
c) Pull out a couple of recent credit card statements you typically use to pay subscriptions. List them along with the charge amount.
d) Add them up. See how much you spend every month on all these subscriptions.
There you go.
Now that you have everything in one place, something is bound to catch your attention.
A $10 per month for an unused subscription would not seem as much unless you realize that you would have spent a solid $240 over a couple of years if you did not stop it at the right time.
A consolidated subscription list might make you wonder why you are still paying for some subscriptions you no longer use - or you don't need any longer.
That feeling might be an excellent motivation to start using a subscription tracking tool going forward!