A study on 2,500 Americans, led by Waterstone Management Group, revealed a significant gap in perception and reality regarding subscription services spending. 84% of the participants underestimated what they spent each month on subscription services; the average person spent 197% more than they initially thought.
It's just as bad for companies
Our data indicate that the same thing applies to businesses as well. Companies using Substly think they spend about half of what it turns out they do. It is not uncommon for us to hear reports of people in management almost “falling off their chairs” when they see an aggregate view of their spending on the subscription dashboard. That might not come as a complete shock to some, but what surprised us most is that it seems to apply to companies with as little as 20 employees, almost as much as larger organisations.
That said, spending money on subscription services isn’t bad. 86% of end-users surveyed by BetterCloud said software usage with SaaS applications helps them succeed more than desktop alternatives. And some subscription services may save your company money. Organisations adopting cloud office systems like Google Workspace and Microsoft 365 save more than 35% on their cost, according to the same study by BetterCloud.
So, why is this happening?
Now that most suppliers are moving to subscription-based business models, managing subscription costs is wider than SaaS. Today almost everything is bought “as-a-service”; memberships, newspapers, furniture, coffee, plants, office space, cars, etc. Compiling a list of subscriptions, keeping track of how much is being paid, when renewals happen, who is responsible for a subscription, or keeping up to date with who is using what is a daunting task!
The subscription business model is, in many ways, designed to make you think you pay less than you do by charging you monthly and making products easily accessible to anyone in a company to buy.
Do you feel you have control of the subscription services in your company? Or may your company be like one of that 84 % of consumers that overestimate their subscription services spend?
How to get started tracking subscription spending in a smaller company
Many smaller companies start with a simple spreadsheet. If you’re good with Microsoft Excel or Google Sheets, a spreadsheet might be a sound way to start your subscription management efforts and at least get a list of your subscriptions. If not, you might find it harder than it first seems. But to make it a bit easier, we’ve decided to share a copy of a spreadsheet we used to gather data from our first pilot customers. Feel free to download, use, and save your company money.
As you expand your subscription and user management efforts, you might find limitations while using this or any other spreadsheet; no reminders or notifications of upcoming renewals, no real-time currency conversions, difficulty compiling data for budgeting, transparency within the company, no data repository for documents/contracts, etc.
The ROI of a service that helps you care for all your different services can be staggering. We created Substly to go beyond the limitations of spreadsheets. We hope the spreadsheet gets you started and that you keep Substly in mind when it is time to upgrade your subscription and user management efforts.
