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15 Rules for Finding the Ideal Vendor For Your Subscription Business, Part 1

Selecting the perfect technology vendor for your business can be daunting, but the process is infinitely easier with these 15 rules learned from years of experience.

Very few subscription businesses truly understand how to buy technology and services and match them to their unique needs. Why? Each business’s needs are uniquely their own. They need to make sure that whichever vendor they partner with matches what they truly need, whether it is a platform, tools or other services.

Cadillac vs. Prius

What happens when subscription companies don’t match a technology or services vendor to meet their unique needs?

  • They buy a Cadillac when they only need a Prius.
  • They overbuy, finding a vendor whose promises don’t match the reality of what they’re delivering.
  • Their partner is inflexible and has rigid functionality that impacts their company’s ability and needs to grow.
  • They’re held hostage to contracts that are restrictive or their vendor’s poor performance hinders a company’s ability to grow.

Subscription businesses must be diligent in doing their research to avoid pain points and minimize the potential for these issues and others. As you might have guessed, I learned some of these lessons the hard way, so I am sharing them with Subscription Insider members to help you choose the right vendor for you and your business.

Even if you are selecting a self-serve technology vendor with a free trial and a credit card, these guidelines are relevant. The difference between that purchase and one with a sales executive and a formal RFP is one of scale, but the decision is no less important!

Photo collage with a white Cadillac on the top and a white Prius on the bottom. A subscription business shouldn't buy a Cadillac when it only needs a Prius.
Source: Adobe Stock Photo

Here are my top 15 rules for researching vendors for your subscription business.

Rule #1:  Know thyself.

It sounds simple, but it is such an important rule. I referenced it in a previous article if you want a refresher. It is important to know your budget, resources, and even your technical mojo when constructing your business requirements for your technology partner.

  • Budget: Are you on a tight budget, the old “beer budget,” or do you have some flexibility? Maybe you’re more on the champagne spectrum? Your budget is going to have a direct impact on the types of vendors and the options you’ll have available to you, so it is important that you check your piggy bank before you shop.
  • Resources: What outside resources, if any, will you need to implement and manage your technology solution? If you are going for an in-house solution, make sure you have those resources to support your new platform. If you don’t have the in-house staffing or expertise, what’s your budget for outside resources, and what types of people do you need to support your solution?
  • Technical know-how or mojo: Your technical know-how is critical to understanding what needs you might have for potential support, whether it is installing, supporting and/or maintaining the technology you’re considering.
Champagne on the left, beer on the right. What type of budget does your subscription business have?
Source: Canva

Rule #2: Document your needs and requirements.

Before you do any research, “Tell me what you want, what you really, really want,” to quote the Spice Girls, and write it down. This includes the features and functions of the platform you need and your budget. And your budget goes beyond the initial purchase price of a technology solution. Consider the total cost of ownership.

The total cost of ownership includes not only what you would pay to a vendor, but also the cost of in-house resources or resources if you outsource to a consultant to install and maintain. What does it cost to buy a technology solution on a subscription or license basis? Are there any installation fees or extra costs? How about upgrades, vendor support, and the cost of ongoing resources?

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Rule #3: Identify needed resources.

Speaking of resources, what will your subscription business need in-house, not only from a technical standpoint but also from a human resource perspective? What other staff or teams will you need to implement the solution, get it rolling, and support it on an ongoing basis? Also, consider your timeline. Do you need this installed and up and running tomorrow, or are you looking at a longer horizon before installation and implementation?

These are all important questions to know and understand. As we dive deeper, I recommend you set up a document or spreadsheet to record this information. The format doesn’t matter – Google Doc, Word doc, Excel, Google Sheet, Smartsheets, etc. – as long as it works for you. On the left-hand side of your document, write down your requirements. As you go through the review process, compare the requirements to the different vendors you’re evaluating.

Source: Adobe Stock Photo

The key here is to create a document that you can edit and adapt as you learn and move through the vendor review process. Personally, I like a good spreadsheet where I can use the columns to compare and contrast different vendors I’m considering. This helps me visualize and understand the benefits, strengths and weaknesses of a particular vendor or solution based on my company’s unique needs.

Here are some additional questions to ask yourself if they are relevant to your specific business.

  • What type of business is my subscription business? This is relevant to help you identify companies who understand your type of subscription business. Your needs will be very different if you are a direct-to-consumer business versus a subscription software company versus a subscription digital media company, for example. Identify your type of subscription business and, as you compare vendors, see how much experience they have with your specific type of recurring revenue business.
  • What are my business goals? Understanding your goals is important for vendors to know. For example, if you intend to manage a high-volume subscription business in 12 months, that’s good to document, so you can compare your vendor’s ability to support that goal in your research. If they can’t grow and scale based on where you want to be, they’re probably not the right fit for you.
  • What are my current technology and process pain points? This is an important question to document for several reasons. When talking to vendors, you want to be sure they understand what technology you’ll be “unplugging” and what works about your current solution or process versus what doesn’t. As you research options, you can map out a vendor’s strengths, their features and functions, and see how they match up with what you want to improve from your current system.
International team of coworkers sitting around table, putting colorful puzzles together, teamwork concept, top view, practicing a resource assessment exercise
Source: Adobe Stock Photo

Rule #4. Document your current technology stack.

What are your company’s requirements and needs for your unique “puzzle” or tech stack requirements? This could be as simple as needing an all-in-one platform or as complex as needing a robust subscription management platform that ties to multiple payment processors, a fulfillment house, and a marketing automation platform natively. Understand what you have, so you can evaluate what you may or may not need. Document the technologies and systems you’re currently using for easy comparison when talking to vendors. You don’t want to buy a Cadillac when you need a Prius.

Rule #5. Document processes and identify data mapping.

Ask yourself if you can create the documentation and data map you need. Even with the most straightforward all-in-one platforms, you really need to document your setup, flow of data, communications, and payments, even if you are doing that in a low-tech tool like PowerPoint. This helps you as you communicate what you need to your own team and to the vendor team that will be implementing your solution. It will also help you document your processes to refer back to what you implemented and maybe how and why you did it that way long after the solution has been employed. This will also be useful should staff change at your company or the vendor you ultimately select. Documentation can help make sense of things and make your organization more sustainable.

Source: Bigstock Photo

Stay tuned next week for part 2 where we’ll cover Budget, Proprietary vs. Open Source Technology, the Cloud, Team Adoption and Year-Over-Year Costs.

Copyright © 2023 Authority Media Network, LLC. All rights reserved. Reproduction without permission is prohibited.

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