Repeat business is the foundation of any brand. Whether you are a subscription-based business or not, loyal customers almost always make up the bulk of your business transactions. And that’s why you should be concerned about subscription billing best practices.
Subscription-based business relies even more heavily on repeat customers, and that makes it feel like your service has to be consistent and superior every single month, quarter, and year.
So, let’s go through some subscription billing best practices that will help keep your subscription numbers high and your unsubscribing activity low.
Find Your Perfect Pricing
Pricing your products and services correctly is just as important as naming and organizing your products and services on a website, for Google SEO, and other brand-specific optimizations.
Your subscription-based business not only competes with other subscription models in your industry but also with on-demand and single-transaction businesses. This means the barrier to entry for your customers and clients can pose a significant hurdle.
This is where your pricing comes in. The convenience of recurring orders can’t compensate for an inflated price, and if you set the pricing too low, you could be perpetuating the perception that your brand is cheap.
There are two important questions that should guide your pricing strategy.
- Does your pricing cover your business-associated costs?
- Does your pricing match and maximize the amount your customers would be willing to pay for those products/services?
Subscriptions are used most heavily by Millennials (customers who are currently between 25 and 40 years old), because they love quality and experience more than they need a good deal. They also know that the cheapest products often lose their value the fastest and can be more expensive to reorder over and over. This primes these customers to embrace a subscription model, which can be used as the primary business model, or it can be supplementary, like Amazon and Amazon Prime.
Subscription pricing is even more tricky when your business is a hybrid model. Take the Amazon example – if Prime offered the same things that a regular Amazon account does, there would be no interest in the subscription model for most customers. But because there is an inherent and perceived value associated with the service, the Prime account is more desirable (and not just because of the ease of recurrent billing). This value is the basis of another of our favorite subscription billing best practices.
Communicate Value Early and Often
The value of your products and services dictates your success in your industry or marketplace. And subscription services must communicate that value in a way that not only touts the products and services, but also the added benefits of receiving these goods in a subscription format.
This value can be shaped and optimized over time. For example, there are food subscription services that offer incentives and free months after subscribers have purchased continually, for a year or more.
You can also bill subscribers for “exclusive” boxes and other seasonal or one-off campaigns. With ReliaFund’s integrated payment processing system, it’s easy to run recurring payments right along with other standalone purchases.
Invest in Quality Payment Processing Technology
You’ve often heard about small business owners struggling to get quality business products and supporting services because their size isn’t compatible with the bulk discounts that big corporations get. With ReliaFund, you can run the biggest or the smallest subscription-based business, and we will still be able to accommodate your business and your customer payments.
There are payment systems like Square that helped revolutionize small and medium-sized business transactions with ease, but each of these individual payment systems means you are running through a dozen different accounts and software options, with no real way to integrate and combine all your payment and billing data. Investing in tailored payment processing software can really elevate your subscription billing by easing the workload for your staff and making the process quick and convenient for your subscribers.
ReliaFund is an integrated payment processing provider, and we have the technology to cater to your specific business needs, including everything from checks to digital payments, credit card transactions to recurring billing, and even same-day ACH payments for larger transactions.
Need Help with Subscription Billing? Meet ReliaFund’s Recurring Payments Services.
ReliaFund offers a whole host of online payment processing software, but we wanted to focus on the recurring payments segment of our services today.
Using ReliaFund’s software, you can tailor your recurring billing to send monthly, quarterly, or specialized statements. You can do this for any type of subscription product or service. Do you have a seasonal or part-time business like a flower mart or prevention extermination and spraying services, which typically mean spring and fall busy seasons or specific months of operation? Or maybe you are just looking to send monthly products or services to people who enjoy the “set it and forget it” shopping model where you send home goods or food products at a specific time of the month.
No matter how you need the recurring billing to be set up, ReliaFund can help you create your system so you can monitor your payments, invoices, and even pull reports to ensure your recurring business stays on track.
Have more questions? Call or contact us today!