No matter how fantastic your services are, no one wants to give up their hard-earned money. So, why not make the payments more manageable than ever could be. Subscriptions are a win-win for customers as well as for businesses. Nowadays, more and more companies are offering Subscription billing facilities to their customers. While customers enjoy frictionless billing features without needing to make any efforts, businesses get a steady stream of revenue and reliable forecasted revenue.
This recurring payment system enables businesses to deduct the charges from their customer’s accounts at predefined intervals (annually, monthly, weekly, or custom intervals) for the products and services. When customers subscribe to your products or services, they are prompted to select their preferred payment medium and permit the authorized business to deduct the particular amount of money automatically from their account at a regular interval.
This type of billing system is being used by various types of businesses belonging to different industries. Some common examples of companies are:
- SaaS applications like Dropbox, Slack, or Google Apps.
- Gym memberships
- Newspaper and magazine subscriptions
- Telecom businesses that provide metered billing
Advantages of subscription billing for businesses
Attracts more customers
This type of billing system allows your prospects to purchase your products and services. The more expensive your product is, the fewer customers are likely to buy it. There is no denying that charging $20 per month is more attractive to potential customers than charging them $400 at one shot.
Reduces missed or late payments
The customers’ missed or late payments lead to potential loss of funds and increased administrative costs associated with chasing payments. Therefore, subscription systems give businesses a double win.
Develop a loyal customer base
Unlike traditional sales, subscription facilities enable businesses to build long-term relationships with customers. The data obtained can be utilized to customize products and services that cater to the customers’ specific needs, which ultimately helps you build a loyal customer base.
Offers predictable revenue
When operating a pay-once model, you must constantly attract new customers and convert them into paying customers to earn revenue. In such a case, sometimes it becomes harder for you to even recover your investment for a poorly performing month. However, with a subscription-based model, your customers make payments to you regularly, which means you are getting at least some fixed revenue every month. Hence it helps you predict your monthly revenue and plan your supplies and stocks accordingly.
Whatever might be the type of business you own, customer data security would be a primary concern for you and your customers. High-end subscription models are designed to help you with the same. They are made adaptable to the ever-changing data security standards and PCI compliant to rest assured that you are offering maximum security to your customers.
Advantages of subscription billing for customers
Focus on their needs
With subscriptions, customers can choose based on their specific budget and needs. This makes customers feel more comfortable and inspires positive sentiment towards the business.
Set and forget
The Subscription billing system automates the payment allowing customers to choose their payment preferences at once and enjoy the services for a more extended period. In today’s busier lives, where people forget to take meals, subscription models are a boon to enjoy their purchases without unnecessary payment distractions.
Simplicity, Flexibility, and Time-saving
Another widely appreciated advantage of subscriptions is their simplicity and flexibility. Though customers are asked to fill in their details and preference once, that doesn’t mean they can’t make changes later. Of course, they can! It allows customers to alter their subscription inclusions, payment details, or even terminate subscriptions. Moreover, it helps save customers a lot of time and effort that they would have to put in every time they make purchases.