A unified approach to payments and billing with Stripe
A fundamental shift in how high-growth businesses handle revenue operations has occurred over the past few years. At MHI, we experienced this seismic change with many of our clients and are excited to talk about it.
Much of this shift lies in the fundamental way in which companies position their revenue management processes. Instead of treating revenue management as simply a back-office process, they grew their goals and expectations for billing. These companies have begun to leverage billing as a front office process. Billing is an avenue for companies to boost revenue, leverage customer loyalty, enable testing out new product pricing, and expand into fresh markets.
To do all this requires a uniﬁed approach to revenue that allows businesses to make the customer payment experience straightforward and automated. Billing built with tools for revenue, which improve customer loyalty, include automatically retrying declined payments, allowing for easy card detail updates, pre-built email payment reminders and built-in fraud protection. A unified approach like the one offered by Stripe Billing - that has helped over 100,000 businesses grow recurring revenue - is the focus of our interview today.
We sat down with Stephen Wolff, Solutions Architect and Managing Partner at Myers-Holum, Inc. (MHI) to find out what is happening in billing that is so transformational and why Stripe Billing specifically has positively impacted our clients’ front-office processes.
How does a uniﬁed approach to billing impact the revenue stream?
Stephen Wolff – With a billing solution like Stripe, businesses really have an opportunity to make the customer experience seamless and take advantage of its machine learning capabilities. Higher customer loyalty means enduring revenue. Loyalty is gained through providing great products and services, but also painless purchasing. Customers have more control with Stripe.
In a subscriptions scenario, a customer can easily upgrade, downgrade or cancel a subscription. They can also update their preferred payment method and view their billing history. Stripe uses machine learning to optimize retry logic and minimize the number of failed payments. Stripe has documented higher payment recovery using its smart retries versus traditional ﬁxed time schedules. To give you a sense of how ubiquitous Stripe really is, 90% of adults in the United States have bought from businesses that use Stripe, and over 100M Europeans have made a purchase with Stripe this year alone.
Would you give us an example of unified system's real impact with a use case?
Stephen Wolff – We have dozens of use cases. One case study regularly shared by Stripe is with Postmates. They process billions of dollars in payments and needed to reduce unnecessary customer declines at checkout and of course, increase their revenue. By adopting Stripe, Postmates boosted their authorization rates by 2.16% across all the credit card networks like Visa, Mastercard and AMEX. That sounds like a small boost, but it meant over $70 million US dollars in additional revenue.
You mentioned subscriptions as one scenario for billing. What’s the flexibility of Stripe in terms of broadening a business’ types of billing?
Stephen Wolff - That’s a good question. You want flexibility with your pricing strategies – especially when we are talking about companies experiencing high growth. It’s really up to the business.
There are lots of options: flat rate pricing with monthly, quarterly, or annual fees; free trials with delayed payments on active subscriptions; tiered pricing for a product or service offered at different prices; overages with charges for a usage that exceeds a quota; metered pricing based on product/service usage; per seat pricing depending on the number of active users; coupons that specify which transactions to discount to and how much (i.e., percent or a ﬂat amount); as well as tax rate modeling that automatically calculates and collects sales tax, VAT and GST. So, as you can see it’s very versatile.
How does having these options have an impact?
Stephen Wolff - Having a billing system like Stripe that allows you to respond to customers' needs really changes the billing landscape and ups the ante for Stripe competitors. This is because businesses can immediately simplify their payment collection, manage U.S. and other countries’ regulations as well as a support customer-centric payment models. These range from subscriptions to seat licensing. It includes all the additional bennies that customers love like promos, coupons and discounts, etc. but without added complexity for the business since it’s built into the product.
It sounds like Stripe has robust out-of-the-box functionality. Does it play well with other systems?
Stephen Wolff – It is a robust platform that offers one quote-to-cash pipeline, automatic invoice collection and reconciliation as well as streamlining operations to overcome regulatory hurdles. In terms of integrations, that’s where Myers-Holum comes in. We integrate Stripe with NetSuite and other systems to ensure everything is streamlined across the entire enterprise. We build out customizations for our clients to ensure connectivity across all systems and provide enhanced reporting so that immediate insights into their specific KPIs and data are possible on an ongoing basis with current reporting and dashboards.
Are Stripe and Myers-Holum partners?
Stephen Wolff – Yes, we are very selective about how we choose our software partners, and we are very proud to partner with Stripe. You know that Forrester ranked Stripe as the leader for payment solutions in its Forrester Wave™: Merchant Payment Providers, Q3 2020 where they assessed the top ten providers and how they stacked up to each other. Forrester listed scale, technology, and speed of innovation as the key differentiators in their selection of Stripe. From our experience implementing Stripe, we definitely agree with their assessment.