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Moving some, all, or simply more of your software offerings from a one-time perpetual license model to a software as a service (SaaS) subscription model can be daunting, but it’s so powerful for building dependable, recurring revenue. If your company is considering making a SaaS transition, Brad Sams of Stardock knows what you’re going through.
As the VP and General Manager of the Stardock Software division, Brad led his team through this process and has learned some valuable lessons about doing it as strategically and easily as possible.
FastSpring is proud to have been a big part of supporting that process for Stardock, and Brad had some great things to say about how easy we made it for them. We asked him to share his process tips for anyone who might be considering or actively planning the same transition themselves.
Here are Brad’s top recommendations:
- Have a committed partner like FastSpring to handle the subscription infrastructure so you don’t have to, including:
- Choosing a partner that’s making the same investments in subscription management that you are.
- Letting FastSpring handle the subscription infrastructure.
- Integrating customer-facing subscription management tools on your own site.
- Start small with an incremental approach.
- Communicate frequently and clearly with customers about the transition.
- Prepare for renewals with value adds to reduce churn.
- Design the transition plan that’s right for your company.
Are you looking for a merchant of record that will partner with you to grow your SaaS business? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and other digital goods businesses, including subscription management, payment localization, VAT and sales tax management, consumer support, and more. Set up a demo or try it out for yourself.
5 Tips for Making the SaaS Transition Easier
1. Choose FastSpring for Subscription Infrastructure and Long-Term Partnership
Stardock Software first started using FastSpring in 2018 to help them sell their software products, and they’d always had a relatively good experience with how FastSpring handles sales of one-time software purchases.
Luckily, FastSpring was able to make the transition to subscriptions very positive, too — about as simple as replacing a few SKUs on their site (more on that below).
This was a relief, since the technology behind subscription management for software purchases can get very complex very quickly, with many scenarios that need to be accounted for and multiple technological components that need to be covered.
“Most people would not think about all the intricacies that have to happen” when switching from a single transaction to a subscription, Brad explains. “As an example, you have a product that was previously purchased once, and it worked forever. Now you suddenly purchase a product, and it has a time box on it that is tied to a subscription — which means that product now has to stop working if a user stops paying for it. So that gets complex. And then, what do you do if they’re offline? What do you do in all these different scenarios? There’s a real dividing line here, which is where FastSpring came in.”
When Brad and his team started planning to test the SaaS business model in spring of 2023, knowing that FastSpring already had the infrastructure to support subscription sales meant that Stardock Software didn’t need to build their own, search for a specialty tool or service, or worry about that part at all, really.
“The worst thing that can happen is, you make the switch to subscription, and then your technology fails to make the switch effectively. And we were only able to do this because we had confidence that FastSpring’s subscription model would support our endeavors.”
“We were only able to do this because we had confidence that FastSpring’s subscription model would support our endeavors.”
FastSpring is proud to have been a key part of Stardock’s business ecosystem as they tackled an initiative that’s driving major growth for their business.
Choose a Partner Making the Same Investments In Subscription Management
Brad admits that Stardock will always be in a position that keeps them from being “married to any single vendor,” and they know FastSpring isn’t the only merchant of record or subscription management tool on the market.
“But at the same time,” he explains, “we knew that with moving to a subscription model, we had to bet on a partner who was making the same level of investments that we were making. And the conclusion was that FastSpring was on that path of continued investment and wasn’t just collecting the paycheck every month and doing nothing.”
“We had to bet on a partner who was making the same level of investments that we were making.”
Brad was able to see where FastSpring was making those investments, as product updates rolled out and as future timelines and roadmaps were shared with Stardock by their Customer Success Manager, Danica. He says that helps, because “it’s like, ‘Okay, if we’re going to go subscription (which again, ratchets up the stickiness factor for FastSpring), then we’ve got to make sure FastSpring is going to be here for the long run, too.’”
Brad went on to describe Stardock’s relationship with FastSpring as “symbiotic.” “Because the better we do, the better FastSpring is going to do. We’ve got to make sure that everybody’s winning, and things with FastSpring just felt aligned.”
Let FastSpring Handle the Subscription Infrastructure
“You have two technical components to this,” Brad clarifies. “You have the subscription side (the actual financial transaction that must occur), and the mechanism that keeps that information updated. And then you also have the actual app itself. So this is where we really started getting deep into FastSpring, because FastSpring already had the subscription components.”
Because Stardock and FastSpring were growing together through this subscription technology journey, Brad saw FastSpring’s earlier iterations of the subscription management tools. That was already enough to make switching on subscriptions a much simpler process than it would have been without FastSpring.
“At the time, it was a little more bare bones, but it had the infrastructure in place to actually allow us to do this. Because at the end of the day, you can’t just turn on a subscription — the whole plumbing pipeline has to be there,” he reiterates. “And so we connected with FastSpring, explained our scenario, they helped us with the documentation and helped us work through some edge cases, and then we were able to wire it up through already deployed FastSpring infrastructure on our end.”
This turned out to be about as simple as setting up a new product SKU on their site that was marked as a subscription, outlining the attributes of the subscription (in their case, annual as opposed to monthly), and setting the price on the product. “There are a few other options in there,” Brad says, “like, ‘How do you want to communicate to the customer that things are about to renew?,’” but it was overall a simple process.
“Nothing in life at this magnitude is painless, but it was able to be done relatively quickly to pivot our business from a modeling perspective,” he assures us. “And that was the biggest value unlock: that we didn’t have to go through and reinvent the wheel on subscriptions for our flexible storefront at the end of the day.”
“That was the biggest value unlock: that we didn’t have to go through and reinvent the wheel on subscriptions for our flexible storefront at the end of the day.”
FastSpring’s subscription management features include:
- Trial management (with or without payment method, and free or paid trials).
- Recurring payment processing.
- Plan management tools for businesses or their customers to manage the details of their subscriptions.
- A subscription overview dashboard with insightful metrics.
- Correspondence automation.
- Churn reduction and dunning management (automatic retrying of failed renewal payments and related email communications).
All of this was in addition to the standard features and tools FastSpring already provides, including:
- Global payments for easily transacting across borders.
- Tax compliance, include calculation, collection, and remittance of VAT and sales taxes.
- Customizable checkouts that are localized to customers and branded with your company branding, plus they’re available as embedded, popup, or a hosted FastSpring web storefront to accommodate your business needs.
- Fraud prevention with intelligent alerts and fewer chargebacks.
- Reporting and analytics, including subscription, revenue, and chargeback dashboards to help you track recurring revenue from your new subs.
- Developer tools like a JavaScript library; FastSpring’s REST API; webhooks; and integrations and connections with third-party systems including marketing analytics tools, CRMs, DRMs, BI tools, and more.
- And much more.
Are you looking for a merchant of record that will partner with you to grow your SaaS business? FastSpring provides an all-in-one payment platform for SaaS, software, video game, and other digital goods businesses, including subscription management, payment localization, VAT and sales tax management, consumer support, and more. Set up a demo or try it out for yourself.
Integrate Customer-Facing Subscription Management on Your Own Site
Besides handling subscription sales and management on the back end, FastSpring also provides account management tools for Stardock’s customers to manage their own subscriptions on the front end.
Brad recommends taking advantage of an embedded subscription management portal to provide a totally seamless experience to your users.
FastSpring’s Embedded Payment Management Components are an embedded same-page subscription payment management experience (including adding, updating, and deleting payment methods) that enables your customers to manage their subscription payment methods without leaving your account management portal.
You can create, customize (and brand), embed, and test the payment management component on your own site to give your customers the best experience possible while managing payments for their new subscriptions.
FastSpring can act as an end-to-end subscription solution via our subscription API, ranging from getting subscription data, updating account information, and showing proration previews of estimated proposed plan changes to customers — all within your portal.
2. Start Small With an Incremental Approach
FastSpring having the subscription management technology handled meant that — besides being able to focus on software development instead of on the tech needed to sell their software — Brad and his team were able to focus on other nuanced facets of making the switch beyond the technical specs, such as which products they wanted to switch over to the subscription model first.
He recommends that you start small and cascade any learnings to additional products as you add to your subscription offerings.
“Our model was ‘Start small, risk small,’ and then ‘Move big, risk big.’ And by that time, it was no longer ‘Risk big,’ it was ‘Manage big.’”
“Our model was ‘Start small, risk small,’ and then ‘Move big, risk big.’ And by that time, it was no longer ‘Risk big,’ it was ‘Manage big.’”
While Stardock had multiple products with multiple support add-ons already, Brad outlined that they started the subscription experiment with one support add-on for one product, and for one specific subtype of their customer base. “What we started with was actually support and maintenance of a specific product. As an example, we sell Fences®. Fences® sells a lot to enterprise customers. Where we started trialing it was, Fences® the product remained a single point of transaction, but we introduced an option that would allow you to purchase annualized subscription maintenance and support for a reduced cost.”
Essentially, you can apply a few filters to your products, add-ons, and user types to get a relatively small experimental group. “We just started on one particular product that we knew sold in volume with one particular scenario, which was only business, and then one particular type of customer who’s like, ‘I’ll take the discount for the renewal.’”
Once you start to see those first subscriptions begin to flow in, you can gauge whether it’s flowing as expected and make adjustments as needed, Brad says. “You compare and contrast, like, ‘How many people are choosing the subscription?’ And then you just amplify things up. You go to another product, and go to another product. And then you try a primary product. And then you try the big suite,” which for Stardock is Object Desktop™, containing all of their apps. “That was the big switchover once we had confidence.”
Starting small helped Stardock avoid any large upfront risks as they began testing the benefits of SaaS.
3. Communicate Frequently and Clearly With Customers
Communicating business model and/or delivery model changes to your customers can be a real struggle, and they can greatly affect the user’s experience and relationship with your company and your product. Brad recommends you put a lot of strategy and care into how and when you announce upcoming changes.
“It distills down into reducing risk, not from a technology perspective, but from a communication issues perspective. There’s no way to mitigate all possible communication issues, and marketing is always the last thing you put out,” he says.
“It distills down into reducing risk, not from a technology perspective, but from a communication issues perspective.”
“There are a lot of challenges from the perspective of marketing, communication, educating the end user, unlocking value, and creating expectations that what you’re doing is better for everybody involved,” Brad outlined. “Because it’s really easy for people to hear ‘subscriptions’ and think, ‘Oh, the business just wants to suck more money out of us.’ And that’s not the path we tried to take, but that’s always the narrative that’s going to be pushed, from a client perspective, onto you.”
Brad further explains that “Anytime you move anybody’s cheese, they get really upset. People will say, ‘I’ve been a customer for 20 years, and suddenly you’re changing your business model! Why are you doing that? Is it because you hate money?,’” he quotes, implying that customers may threaten to stop using the product.
He says challenges like those are evergreen and will continue to come up, so being proactive about communicating changes is key to working through the change with your customers, especially long-term ones.
Stardock’s “Start small, risk small; move big, manage big” rollout model really applied to customer communications.
“If you try to go out the gate with a really high value, then the marketing messaging must really be on point to the dollar value you’re trying to charge for your SaaS service or product.”
But since Stardock had started their SaaS transition with a small subset of products, they were able to test communications and evaluate customer feedback in a very manageable pipeline before transitioning to their larger core products. “Because once you put your core product out there in that model, the amount of inbound communications you get is a lot,” Brad tells us. “And to try to manage that, we needed to be prepared.”
Those inbounds from customers can come from anywhere, he says. “From every possible direction — you get it from your forums, you get it through email, you get it through social media, you get it through phone calls, you get it everywhere, because people are trying to figure out what you’re doing. And you learn real quick — and I mean real quick — where your communication wasn’t clear or effective.”
But thanks to the small-to-big transition plan, those learnings get applied to the next larger product you roll out on subscription, and the communication bumps you may experience at first are only with a relatively small subset of customers. For the next round, now you know where, when, and how additional communications need to be posted.
4. Prepare for Renewals With Value-Adds to Help Reduce Churn
Because Stardock opted to offer their subscription software on an annual pricing model instead of monthly — and because they launched subscriptions a little under a year ago, not just to new customers but also to all existing customers at the same time — Stardock’s first big renewal period is yet to happen. But it’s quickly approaching.
“For us, the big question for 2024 can be summed up in a single word: churn,” Brad explains. “We have expectations and some modeling that suggest where things should land. But this will be the year for us to determine how we approach subscriptions going for year two and effectively beyond.”
Despite the possibility for churn, he says they feel they’ve added a lot of value to their SaaS products. Besides having FastSpring’s retention-supporting features such as churn reducing dunning management as part of their tech stack, Stardock is releasing new apps and services for their subscription products to add to the real and perceived value of their products to customers. “We’ve tried to increase the value from our perspective, and we’re going to learn real quick whether or not we’ve increased the value from the user perspective.”
5. Design the Transition Plan That’s Right for Your Company
Back when Stardock had begun planning a SaaS transition for their products, Brad says they heard a few different things within the industry about the absolutely best way to do it. One particularly common piece of advice was to “go cold turkey” and launch everything as SaaS all at once.
“The best way I can describe my job is trying to decide what advice is bad advice,” he told us. “And I would say that was bad advice.”
That hard-won sense of discernment is how Brad and Stardock landed on the small-to-big rollout plan, which really worked well for them.
But he recommends that any software company evaluating if and how to make the switch to SaaS should decide what’s best for their own company, without just listening to the loudest chatter in the industry.
“Every company is unique in what their clientele will expect and/or tolerate.”
“There was no company that we talked to who had gone through similar things, that had the same experience as us, and nobody after us will, either,” Brad assures us. “Every company is unique in what their clientele will expect and/or tolerate.”
Partner With FastSpring
Ready to explore how your SaaS or software business can benefit from FastSpring’s continued commitment to subscription management product development?
FastSpring is a merchant of record that provides an all-in-one payment platform for SaaS, software, video game, and other digital products businesses, including subscription management, global payments, fraud prevention, VAT and sales tax management, consumer support, and so much more.
Set up a demo or sign up to check out the platform yourself.
Related Reading
- Visit our Subscription Management product page for more info and links to our documentation.
- Read more about how FastSpring helps SaaS businesses move subscriptions on our SaaS solutions page.
- Hear from many more satisfied FastSpring customers on our Case Study page.
- Check out our Dashboards documentation page for detailed info on our subscription, revenue, and chargeback dashboards.
- Wondering about how SaaS renewals might go? Read SaaS Churn: Myths, Benchmarks, and Strategies to Retain More Revenue for benchmarking data and five tips for reducing SaaS churn.
- Still not sure you fully understand dunning management? Read more about what our dunning management features do to help reduce failed payments and involuntary churn.
- Wanting to sell subscriptions with a sales team? Check out FastSpring’s Digital Invoicing and Interactive Quotes.
- Running a startup that’s focused on getting a great valuation? Listen to our podcast episode on What Brands Look for When Considering Acquiring Software Companies.
