Recurring billing is not a new concept; it has been around for years and has been a rather popular billing mechanism for software-as-a-service (SaaS) providers. More and more non-tech companies are jumping on the subscription economy bandwagon and in the process discovering a raft of benefits.
Recurring billing is ideal for subscription or membership-based services and allows businesses to automatically charge customers on a periodic basis such as daily, weekly, fortnightly or monthly.
So, whether you’re ready to implement a recurring billing platform or still wondering if this solution is right for your business, this post is for you. Outlined are some key considerations to keep in mind, as well as some of the ways you stand to benefit when implementing a recurring billing solution.
Will recurring billing fit my business?
An entire generation of new-age businesses is rethinking the old model of one-time payments and offering their products and services on a subscription or membership basis. Granted, some businesses lend themselves more easily than others, but if any of the successes are anything to go by, a subscription model can work for almost any product or service regardless of the industry. It’s a matter of getting those creative juices flowing. Here are some examples to get you started.
Netflix offers video streaming on demand. Birchbox subscribers get a regular supply of beauty products in the mail. Recently, Amazon Prime has been making headlines with its membership program that gives customers access to exclusive deals on video streaming, books, music and other Amazon products with free shipping.
If you’re consulting, productise your expertise by selling subscriptions to your online magazine. If you’re selling consumables, offer subscribers different batch sizes, delivery schedules, early access to new products, exclusive member discounts or free samples.
Worried your customers may not buy into the recurring billing model?
Customer expectations have changed a lot thanks to technological advances. The subscription economy is overthrowing the traditional model and is becoming the new norm for consumers. It’s time businesses kept pace with these new expectations.
Selling recurring billing to your customers may require a shift, especially if you’ve only been offering them a one-time payment model. It could potentially be a big shift for them to consider recurring billing, especially if they are worried about their credit card details being stored in your database.
Here are a few ways you can make recurring billing attractive to customers:
– Make billing more manageable.
Instead of being lumped with a hefty-size bill, your customers can accommodate big-ticket purchases in smaller, more manageable payments.
– Late payment fees become a thing of the past.
With the convenience of set-and-forget, your customers can be assured that they will not be slugged with late payment fees.
What more do you need to offer?
Keeping the best interests of your customers in mind, ensure your billing software provider is prepared to guarantee security. Look for a level 1 PCI DSS compliant provider – that way you know that your business and customer data enjoys the highest level of security.
While security is paramount, also ensure the sign-up and checkout experience is simple and an easy process for your customers.
Benefits for Business
The biggest benefit for business is evident in the name. Recurring billing means your business can expect predictable cash flows. You know when subscription payments are due and you can be sure they’ll flow in as expected.
While it may take some time to set up or ship your offerings, in just a few clicks recurring billing gives you the ability to shape different subscription tiers. This can help boost opportunities for conversion. Experiment with delivery schedules, product batch sizes, product denominations and see what helps improve your conversion rates. Lastly, recurring billing can help build long lasting relationships with your customers. Ensure your loyal subscribers are the first to avail special deals, discounts and new product offers.