Buy vs. Build: The Subscription Billing Iceberg Effect

We have heard it hundreds (if not thousands) of times:

“But I simply need to bill my subscribers $xx/month. Why shouldn’t I just build my own logic on top of [insert gateway name]?” Although we can make a compelling argument, it doesn’t always win over prospects.

Luckily, we hear back from many 2-3 months later with….“I wish we would have gone with Chargify from the beginning.”

Below, we’ll shed some light on the great buy vs. build debate. But first, it’s important to understand the reality of the question. Managing offers, reliable billing, and subscription lifecycle management is complex, creating an iceberg effect for companies that decide to tackle it on their own. Initially, businesses only see a few basic requirements, but later realize there is much more hidden below the surface as it relates to the ongoing creation and maintenance of custom code.

Nick Sonnenberg, Co-Founder of Leverage, explained that “Chargify has a wide variety of capabilities you don’t know you need until you need them, such as dealing with expired credit cards by notifying the client automatically. It allows us to upgrade, downgrade, or cancel a client’s subscription easily. There’s a self-service page, which allows clients to update information on their own. It provides metrics month-over-month on critical data such as the number of customers, revenue, and lifetime client value.”

Looking back at their own experiences, Sonnenberg has this advice for new subscription-based startups: “Start with Stripe + Chargify. You’ll save time and money in the long run.”

The real question is no longer as simple as “buy vs. build,” but instead…should you buy a best-of-breed solution (such as Chargify) to manage your offers, billing, and subscribers, or build your own logic on top of a payment gateway + buy various third parties tools to manage the subscription lifecycle + integrate everything together + maintain custom billing code and integrations?

In this post we dive into understanding the billing iceberg effect and what to consider when determining if you should build or buy your recurring billing solution. Let’s take a closer look at what you should factor in when deciding which route is best for your own company…

Time Is Money: Focus On Your Core Competencies

Billing may not be one of the most exhilarating parts of your company, but it is one of the most important parts of your business…it is how you get paid.

Time is money (especially in the SaaS world), and whether you’re an early stage startup or an established business, development resources are almost always at a premium.

Using precious development resources to build and maintain your own recurring billing code, and all the complexities that arise, 1. costs money and 2. slows down momentum by taking resources away that could be focused on building a better product and serving your customers more effectively.

And let’s be honest, your developers signed on with your company to build features for your core product(s). They aren’t usually stoked to be building and maintaining the less glamourous subscription billing and management tools.

When you take a step back and think about everything involved with managing your price plans, experimenting with offer optimization, accurately billing your subscribers, managing their subscriptions, accessing reliable analytics, and much more, the list gets long.

For companies who build their own billing integration, they ultimately invest substantial resources in ongoing development work and an arsenal of various third party tools to keep up with their growing needs.

Earth Class Mail CEO Doug Breaker uses a chart, similar to the one below, to help employees understand “if it isn’t critical and strategic, we shouldn’t be writing code for it.”

In an interview with Breaker, he explained how Earth Class Mail identifies core competencies the company should build for:

  • The Strategic and Critical box is where the company should develop its own software and product
  • Anything deemed Non-Strategic but Critical should be outsourced
  • Anything that falls into the Non-Strategic and Non-Critical the company should disregard; it doesn’t need to be part of their business


We looked at several SaaS billing platforms, but none came anywhere close to the robust way Chargify handles metered components. If we had used any other system, we would have had to write the code ourselves to handle our usage based billing. Using Chargify has eliminated the need for a full time developer (or two) to maintain our complex billing needs.
Doug Breaker, CEO, Earth Class Mail


Gaining developer resources back is a common theme that bubbles up in conversations with Chargify customers.


For years we tried to build and manage billing internally to the point where we had a dedicated Engineer to it. Then, we found Chargify. Within a month we had completely migrated every customer, gained an entire resource back, were able to plug into analytics that were never previously available, and — most importantly — cut down failed billing renewals. Chargify is now a core part of our business and has enabled us to implement promotions and upsells that we never had access to in our homegrown system. Chargify has made our business much stronger!
Uri Foox, Founder, Zoey


Move Faster & Scale Successfully

A big part of the subscription billing iceberg effect relates to all the nuances you don’t think you’ll need, but find out are necessary to scale. You can’t and won’t plan for everything up front, especially when subscription billing is not a core competency for your company.

As those nuances come up, a billing bottleneck starts to occur. Common issues of the billing bottleneck include:

  • Not having correct billing in place when new products launch
  • Experimenting with different offers (especially usage or meter-based pricing) is difficult to configure with underlying systems
  • The process to change price points can’t happen in real-time
  • Unnecessary revenue leakage occurs through failed and delinquent payments
  • Control through the revenue lifecycle, from signup to retention, is lacking

And those are just a few examples. Friction points in the billing bottleneck limit new and existing subscription businesses from moving at the speed required to remain competitive and scale successfully.


Chargify allows us to do whatever we need to do. Any time we think of something that we would like to be able to do, or would like to change, we know that it will be easy to do using Chargify.
Tim Saye, Co-Founder, PT Distinction


One area this especially holds true in is when subscription businesses need to start modifying and expanding their portfolio of offers—the combination of product, price, and service—to optimize revenue and accelerate growth.

In today’s complex and rapidly changing digital world, one-size-fits-all subscription plans are no longer enough. Offers are evolving faster than homegrown billing systems can accommodate, and it’s no longer a matter of having a billing system in place that’s built to take revenue…it’s a matter of having a dynamic recurring billing solution in place that can make revenue.


In a business like ours where we’re constantly innovating, updating, and evolving at a fast pace, we expect the same of our billing platform, which Chargify definitely delivers on.
Robert Kern, CTO & Co-Founder, PredictHQ


Others customers have compared insufficient billing systems to having your hands tied because of the limitations and constraints it places on a business:


It is a constant battle to differentiate your business from your competitors and provide unique products or services. If your hands are tied because your strategy is limited by the capabilities of those you rely on, then it will be easier for your competition to mimic or out-maneuver you. Chargify offered us the most flexibility; they allowed us to start with a very basic strategy, build upon it as we learned what worked for us, and then scale it to keep up with our growth.
Lenin Batista, Co-Founder & CTO, SprezzaBox


Building and maintaining your own recurring billing logic will eventually catch up with any business, and when it does, the ability to scale will suffer.

Provide A Better Experience For Your Customers

Quite simply, billing issues leave a bad taste in your subscribers’ mouths and increases churn. But, it’s more than that. Today’s subscription businesses rely on continuous interactions with their customers and must always be able to provide a positive customer experience.

When building your own billing integration, accuracy is not always reliable for intricate billing logic such as add-ons, metered-usage, upgrades, downgrades, proration, etc. There always seems to be bugs involving when and how customers are charged. These bugs end up clogging support queues, angering customers, and fueling churn.

Prior to Chargify, I had almost 10 years working with various SaaS companies. All of which had built their recurring billing logic on top of payment gateways including Authorize.Net, Braintree, and Stripe. Issues with how billing was handled were far too frequent, especially in the upgrade/downgrade use cases. Support was constantly handling billing-related tickets and correcting accounts. It was never truly reliable.

When I saw the opening to join the Chargify team, I was excited because I personally knew the billing bottleneck pain and wanted to be a part of the solution. Fast forward, some of these companies have since switched to Chargify, eliminating their subscription billing issues through reliable, accurate billing that “just works.”

Outside of dramatically reducing the number of billing bugs/issues, support teams can access Chargify’s interface to quickly locate plan information and billing history, issue credits, process refunds, and make account changes. All of which greatly reduces customer support time, thereby creating a better support experience and happier customers.

chargify manage subscription page

Chargify’s Subscription Management Interface

Providing a better customer experience extends beyond reliable billing and great support. For example, Chargify provides a self-service portal where subscribers can update their information or make changes to their plans, and customizables templates to send automated communications for key subscription events such as:

  • Welcome email on signup
  • Trial ending notification
  • Upcoming renewal notice
  • Receipt after successful transaction
  • Card on file expiring soon

The best part is, all the subscription management functionality is available out of the box without the need for custom development, third-party tools, or advanced integrations. Gaining control of the subscription lifecycle from one tool saves a ton of time, resources, and headaches. Are you starting to see a theme?

Retain Customers (And Revenue) Longer

One of the aforementioned billing bottleneck friction points was unnecessary revenue leakage that occurs from failed and delinquent payments. Did you know that up to 50% of lost customers are due to expired credit cards and failed transactions? That is a lot of churn that could be avoided.

“Dunning” is the process of attempting to collect payment after a payment method fails, prior to subscription cancellation. At Chargify, we have helped thousands of subscription-based businesses implement and improve their dunning strategies. For companies who aren’t sure when or how often to retry cards and send dunning emails to their customers (or even what to say in the emails), we provide preconfigured dunning strategies that can be implemented with just one click:

chargify dunning strategies

We don’t believe in a “one-size-fits-all” dunning strategy (and neither should you), so even our preconfigured dunning strategies are fully customizable. This flexibility allows businesses to get started quickly and then optimize for maximum revenue retention.

In the end, a successful retention strategy relies on your business’ ability to efficiently monitor at-risk accounts, proactively prevent failed transactions before they happen, automate communications with past-due customers, and other revenue retention tools. Compared to a best-in-class billing solution, these capabilities range from lacking to non-existent when taking the DIY route.

The sooner you can get a strategy in place, the sooner you can start saving revenue and reducing churn.


At Knobby, we use Chargify’s dunning email workflows to help ensure that past due accounts are re-engaged and maximum revenue is achieved. It works!
Rob Rand, Managing Director, KNOBBY


Understand The Health of Your Business

Understanding the health of your business via subscription analytics is imperative. Trust in the accuracy and reliability in your subscription analytics is mission critical.

Initiatives and experiments to optimize pricing, increase trial conversions, and decrease churn can only be properly evaluated and understood with data to substantiate wins and losses. Without this data, you’re flying blind.

Every business has a set of metrics they obsess over, but in order to move quickly and scale efficiently, there is an entire suite of subscription analytics you’ll need visibility into; everything from MRR movements to churn analytics to finance reports.

chargify subscriber analytics breakdown

Example of a churn breakdown with churn reason codes, part of the Churn Analytics available to all Chargify merchants.

DIY integrations on top of payment gateways do not provide any subscription metrics, meaning you either have to build your own or purchase costly third-party analytics tools.

A few years ago, Chargify customer Formstack spent over $20,000 building a custom SaaS metrics dashboard for their internal systems, but it still didn’t provide everything they needed:


Chargify’s subscription analytics are amazing! They’re much better than what we previously spent considerable time and money to build.
Chris Byers, CEO, Formstack


With Chargify, you’ll gain instant access to our analytics suite that doesn’t require additional development or fees. And, because Chargify is the source of truth, we’re able to see the full picture of what is happening and accurately report on complex use cases that commonly cause confusion and inaccurate reporting through third-party tools. Furthermore, data exports make it easy to download your subscription and revenue data for further analysis or manipulation.

Provide your business leaders and product teams with necessary insights to operate your business more efficiently and accelerate growth.

Support You Can Count On

One of the hardest parts about DIYing your own subscription billing system is not having a support team to turn to when problems arise; leaving you stranded and having to figure things out internally.

Most payment gateways provide very limited technical support, yet alone serve as a resource to help ensure you follow best practices for subscription success. Good luck getting someone on the phone to troubleshoot an API call or give advice on the best way to set up your metered-billing use case.

Buying a best-in-class billing solution provides you and your team with that much needed layer of support when you need it.

At Chargify, we’re constantly reminded by customers that our team of support specialists are the best in the industry. This mentality has built a culture that feels like we’re an extension of the merchants we serve and not just another third-party service provider. But don’t just take our word for it.


Chargify is robust, and has allowed our internal business units more control of their membership base, and revenue metrics; while helping automate and build efficiencies around our processes. The technical and product support has been second to none in my experience.
Scott Beardsworth, Operations Manager, Keller Williams Realty International



We can go on and on about the features we love with Chargify, but the thing we love most is the incredibly responsive customer service. The peace of mind we receive knowing that our account is competently and attentively handled is priceless to us.
Daryl McCarl, Director of Business Development, Smartwaiver


Our support team is one of the many ways Chargify grows with you and helps your business scale.

Wrap Up

Every business battles with juggling their product roadmap and resource allocation. There are strategic/critical initiatives that will propel your product forward, and then there are non-strategic but critical initiatives that are sometimes better to outsource. Your subscription billing and management definitely falls into the latter. Perception is always less complicated than reality ultimately dictates.


We went with Chargify from Day 1 because we realized we didn’t want to enter the recurring billing game, but we needed a best-in-class SaaS billing solution with API access to enable that automation of billing authentication.
Greg McGraw, CEO, MacStadium


In the end the decision is yours on what route your subscription business takes, but we hate seeing businesses invest countless development hours taking the DIY route before throwing it all away when switching to best-in-class solution such as Chargify.

Want to learn more about how Chargify will end your billing bottleneck and help your business move faster? Check out our website, request a demo, or take a test drive by signing up for a free trial.

The post Buy vs. Build: The Subscription Billing Iceberg Effect appeared first on Chargify Blog.

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