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Just kidding. Obviously. Or maybe… not so obviously. Subscriptions and trials have become ubiquitous, and losing track of what is or isn’t going to charge is easy. With so many services vying for our attention, keeping track of what we’ve subscribed to, what’s still valuable, and what’s just cluttering our digital lives is challenging.
That’s why the next profit parasite we’re covering is subscriptions and trials. Subscription purchases are incredibly convenient, and the costs are very predictable (for better and worse), making it easy to forget everywhere your cards are on file. Additionally, apps and tools fall out of use without being canceled, price increase notifications are overlooked, and software licenses are not properly activated and deactivated. These costs snowball into a profitability drain one “small” subscription at a time that can leave your business lost and confused.
It’s death by a thousand papercuts.
Symptoms of forgotten subscriptions and trials
Subscriptions are a hot topic of debate as a business model. They clearly have their pros and cons. We’re not diving into the business model today, though. We are here to talk about how businesses must be aware of the pitfalls that “small,” repetitive expenses present.
Identifying the symptoms of forgotten and useless subscriptions in your business will help you eliminate unexplained operating costs and financial discrepancies while helping you use your resources accurately.
Here are a few symptoms your business might face if unwanted subscriptions and trials have nestled their way into your profits.
Unexpected operating costs
As unused or underutilized subscriptions increase in cost or quantity, your business might notice a slight but steady increase in operating expenses. This constant increase is often hard to locate and can leave businesses looking in the wrong areas to cut costs. This is usually further exacerbated by the fact that the team managing business finances usually doesn’t manage those individual subscriptions.
Budget overruns
Uncanceled subscriptions can lead to budget overruns that might initially appear as anomalies. Once the anomalies continue into a pattern, it’s too late, and businesses are left with wasted spending. And most subscriptions have strict cancellation and refund policies that won’t give you any grace.
Reduced profit margins
Unchecked and growing costs from subscriptions could directly result in decreasing profit margins for your business despite a steady revenue stream. Additionally, most subscription pricing models aim to be just under the “noticeable” radar; they don’t seem like much at any given moment, making them more challenging to notice.
Financial discrepancies
Financial planning and forecasting become less reliable when reporting shows discrepancies between expected and actual expenses. It becomes a never-ending game of “whack-a-subscription.”
Underutilization of resources
When subscriptions go unused or are underutilized, employees could miss valuable resources or spend time inefficiently. Additionally, cash flow isn’t correctly used, leaving your business with restricted spending and missing out on other opportunities.
Poor license management
A lack of managing licenses that are no longer needed means they continue to be paid for as active subscriptions, leading to overspending, especially for subscriptions with user tiers.
The Resolutions
So, how do you deal with and remove this profit parasite? You guessed it. After learning and identifying common symptoms, your business can rely on data visualization to tell you when there’s an issue. Here’s how that happens:
Subscription audit dashboards
You can create custom Resplendent dashboards that aggregate data on all active subscriptions, including costs, utilization rates, and renewal dates. By tracking and visualizing this data, your business can identify unused or underutilized subscriptions that need to be canceled or renegotiated.
Cost-tracking widgets
Additional dashboard widgets can track subscription costs and alert finance teams to unexpected increases that may indicate price hikes or unauthorized subscriptions.
Utilization reports
Utilization reports for software and services ensure that the company is only paying for what it needs. Resplendent dashboards can display this information in bar charts to ensure the data is easily understood and readily available.
Budget vs. spend analysis
Set up dashboards comparing budgeted subscription costs against actual spending. By doing this, you can highlight variances and trigger timely adjustments.
License management tables
Create a software management dashboard with detailed table widgets showing the number of active vs. inactive licenses, who is using them, and their renewal statuses. Managing software licenses using detailed table widgets helps ensure optimal investment in software tools.
Alert systems
Integrate gauge or traffic-light-styled widgets on your dashboard to trigger visual alerts when subscription costs exceed predefined thresholds, or contracts are due for renewal.
Incorporating Data Visualization
At Resplendent, we connect data across your business to transform your business intelligence into something visual and actionable. With entirely visual data presentation, customizable dashboards, and connected data streams, we help you identify, eliminate, and prevent profit parasites like unwanted and unused subscriptions.
If you’re ready to see how magical your data can be, schedule a demo with us today and take the first step towards eradicating profit parasites from your business.
