If there's anything to learn from the success of services like Netflix, Birchbox and Spotify, it's that subscription payments are an incredibly rewarding payment processing solution.
Recurring billing statements have been a favorite of utility and communication companies for years, but now it seems even more businesses recognize their benefits. They're a perfect way to collect revenue for work that doesn't stop, making them great for publishers, nonprofits and businesses that sell software as a service.
Subscription payments are a simple way to attract and retain customers over time. In fact, companies like Adobe saw their customer base increase after switching to subscription payments. What's more, subscriptions can even increase your revenue on a yearly basis. Consider a nonprofit organization that receives donations from the public. A contributor is more likely to agree to donate $12 every month for one year rather than a single $100 payment. It's easier for people to commit to small monthly payments than to pay one lump sum, meaning your business gets more customers and more profits in the long run.
Because subscriptions are more dependable than one-time payments, you can better forecast future profits and other critical metrics. With this information at hand, you can make better, smarter decisions for the future.
There are a few best practices to keep in mind if you plan to add subscriptions to your payment options. You must make it absolutely clear that customers will be charged on a recurring basis, possibly by having them click a check box that says, "I authorize [your company] to charge my card in monthly installments." You must also make sure to quickly and efficiently remove customer payment data from your billing cycle should they cancel. By not taking these steps, you increase the likelihood that customers will become confused and dispute the charges.
If executed successfully, however, subscription payments bring numerous benefits to you and your customers.
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