4 Tips for a Good Recurring Billing Strategy.
Recurring billing is a great way to boost profit and increase conversions. Basically, it’s an easy way to keep billing a client on a periodic basis. It has become an integral part of the greater digital marketing strategy, creating a steady stream of revenue. It won’t be wrong to say that it is a vital component of (almost) every Software as a Service (SaaS) or even some Platform as a Service(PaaS) business models. But it isn’t just for SaaS and PaaS businesses; rather, with the right approach and strategy, it can work wonders for just about any business model.
Also known as a subscription model, it is as easy as starting a subscription service to sell products and services. The first thing to keep in mind is to keep it simple for customers to subscribe or sign up. The harder it is for customers, the lesser the number of subscribers.
Here are your 4 tips for a good recurring billing strategy.
1. Does your product work with recurring billing?
Your product or service must work with the model. If it doesn’t, you can make it work with some creativity. Some leading companies have a built-in tilt toward subscription, with prime members getting a fair share of the deals, which makes them feel special. Amazon Prime is one such service that has made the most of this model. Their products and services naturally lend themselves to a subscription model.
By being a little creative, you can create a sense of exclusivity and convenience, creating value for customers and enticing them to join your subscription service. But again the question is: does your product or service fit in the subscription model? If you are selling hats, a subscription service cannot be of much use. Why? How many hat lovers exist out there who would like to subscribe to your service for a new hat (or two) every month? Now, if you were selling doggy treats, dog owners would be eating them up!
2. How easy it is to start your service?
Such a subscription billing model has a broad and lasting potential, but setting it up takes time and money. It’s challenging to design a customized recurring billing model designed to match the unique needs of your specific business. It is even important to be patient and learn how to manage the complexity of the subscription model. Secondly, it is also crucial to find a recurring payment service that can help you out with subscription billing. There are a number of such services available online.
3. Are you doing everything right?
The most successful subscription businesses do most things right – whether it is related to products or services or convenience for customers. They have unique products that click with customers, besides being a necessary part of life. But it isn’t just about unique products and convenience. You have to go a step further in order to attract and keep customers – provide them with a memorable, unique, and satisfying experience every time they shop in order to earn their brand loyalty.
Remember, experience is the sine qua non of the subscription model that impacts every area of the business —from products to website, customer service, products, billing process, packaging, and brand.
It’s all about shaping and enhancing the customer journey, right from expectations to assessment or feedback. The four features that can help create a positive experience include:
- Focused attention
- Interactivity and engagement
- Increased control
- Greater level of challenge & arousal
4. What about dunning?
Dunning is a necessary evil in the recurring billing model. If you decide to manage it yourself, it is important to create systems that make the process easier, from sending email reminders to counter checking cards, suspending accounts, investigating causes for delayed/rejected payments, and communicating with suspended accounts.
This is too much to manage when you have many other things to do. It’s a better idea to find a service that manages dunning as well, so you can focus on key aspects of your business.
No doubt, there are a boat load of challenges as far as the recurring billing model is concerned. But it certainly is worth the efforts that promise to change the face of your business for the better. It helps in forecasting future growth too.
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