Subscription Business: Switch Customers to Monthly Payments

Subscription Business Model: How to Switch Your Customers to Monthly Payments

Posted 4 years ago by Max Komonov

The subscription business model continues to听emerge as听a听popular option for听aspiring entrepreneurs and听is听here to听stay. This fast-growing business strategy surpasses the听retail and听S&P 500听sectors when it听comes to听revenue. In听the听past few years, recurring billing has grown five times faster than both of听these, making it听an听appealing business model for听new and听already established sellers.

As听more consumers today rely on听monthly subscriptions and听home delivery for听most of听their goods, we听see a听big increase in听companies making the听switch to听this popular marketing model. This growing interest goes back to听the听model鈥檚 focus on听buyer retention, and听its promises of听great growth and听stability for听businesses that choose to听adopt it.

We听hope to听set you up听for听success by听helping you have a听clear understanding of听how you can take advantage of听this growing model. We听also strive to听provide you with the听necessary resources to听get your customers started on听monthly payments today. Continue reading below and听you鈥檒l be听surprised at听how easy it听is听to听switch to听a听recurring billing method.

What Exactly Is听the听Subscription Business Model and听How Does It听Work?

The subscription business model relies on听the听selling of听a听product or听service in听a听recurring manner to听the听same customers. Sellers can charge their customers on听a听weekly, monthly, or听yearly basis, it听will all depend on听your specific business needs.

As听briefly mentioned above, this emerging business tactic focuses on听customer retention more than anything else. Yes, new customers are always needed and听welcomed, but unlike many other businesses out there, that require constant advertising and听customer reach due to听their one-time purchase nature, the听subscription business model focuses on听the听creation of听long-term buyers and听supporters. Ultimately, its main goal is听to听turn customers into subscribers to听produce recurring and听steady revenue.

Due to听its long-term nature, the听subscription business model is听great for听selling products that require consistent purchasing like deodorant, razors, meal boxes, cleaning products, basically anything that is听considered essential and听destined to听run out.

This constant buying and听replenishing of听a听specific product or听service are some of听the听main reasons many prefer, or听sometimes demand, a听subscription payment method. This way they can save money and听have the听items delivered to听their homes, without having to听worry about running out.

In听the听end, besides customers鈥� preferences and听demand, this business model offers sellers recurring revenue and听stronger customer relationships, making a听win for听both sides.

How to听Plan for听Switching to听The Subscription Business Model

Thanks to听the听recurring billing model鈥檚 ability to听offer customers lower purchasing costs and听higher customization of听their purchases, many are already excited that the听switch is听happening. But besides the听enthusiasm of听many of听your customers, it听is听important to听acknowledge that you鈥檒l be听venturing into a听completely new sector, and听it听can be听a听radical shift that must be听taken seriously.

The reasons are many for听customers to听make the听change to听subscription purchases; all you need to听do听is听find the听proper way to听communicate these to听your customers and听stakeholders.

Yes, stakeholders should also be听aware and听on听board with the听change. There is听a听possibility of听a听transition period where sales and听revenue could be听affected and听your decision might suddenly seem like a听bad idea. Warning your stakeholders about this will help them understand more about the听temporary nature of听this event. This only occurs as听you no听longer need to听charge the听original prices established on听the听one-time purchase model. Things should be听back to听normal, or听better than before, in听a听matter of听time.

Key Points for听a听Smooth Transition

Make sure the听transition offers value to听your existing customers. As听these are hit with the听news, they could soon become defensive and听overwhelmed. This could come to听them as听a听way for听you to听get more money out of听their pockets, and听could significantly impact their relationship with the听company. To听prevent this, the听value of听the听transition must be听clearly established and听communicated.

Communication will become your most powerful strategy. Find the听best way to听properly inform them of听the听value behind this change and听how this will benefit them in听the听long run. A听tailored marketing message explaining why this is听of听benefit to听the听subscribers, why should they continue to听choose you from the听competition, and听why the听change is听happening, is听a听great way to听clarify and听address any听misunderstanding.

Never push customers to听subscribe, this must be听a听decision that comes naturally to听them, this is听the听only way you can get them to听stay.

Things to听Know Before You Start a听Subscription-Based Business

The recurring billing method is听truly creating a听lot of听buzz in听the听digital business world, currently being one of听the听hottest business trends. It听is听undeniable that more and听more companies are making the听switch as听customers continue to听demand this kind of听business service. But before you decide to听make the听transition, it听is听important to听consider a听few things.

Make sure your product or听service works with recurring billing as听it听is听not for听everyone

While the听subscription model works perfectly for听many, this is听not always the听case. Before making the听switch, pay close attention to听your business insights, find out what customers want, make sure you have already discarded the听possibility of听a听better option, and听last but not least, follow your intuition.

At听the听end of听it听all, whether the听recurring billing method is听worth it听or听not for听you, will depend on听your business needs and听market.

Avoid plain and听boring products or听services

Most customers are attracted to听the听subscription-based business model mainly because of听the听experience it听has to听offer them. They could easily buy the听same product at听a听local store on听a听one-time purchase basis, but instead, they choose to听subscribe due to听the听loyalty and听partnership created when subscribing to听a听company they trust.

Make sure you are willing to听offer your customers reasons to听subscribe, and听that you are willing to听stay connected, whether this be听through a听newsletter, blog, etc. For you to听be听successful, you must be听willing to听offer your customers a听unique opportunity and听experience they can鈥檛 find elsewhere.

Avoid difficult and听unreliable billing systems

You need to听make sure you have access to听the听right billing tools. It听is听essential to听provide your customers the听necessary technology and听services that enable them to听have the听best experience possible and听see the听value behind the听subscription.

Most modern billing software services come with a听variety of听complex features and听issues, opening a听door to听customer dissatisfaction This ties back to听the听idea of听customer experience and听can be听detrimental to听your business goals.

It听surely can be听scary to听choose from such a听dense variety of听billing services out there, especially when many lack reliability or听cost a听fortune. Thankfully, this is听easily accomplished with 51视频鈥檚 recurring payments for听one or听more items. You can set the听billing cycle to听daily, biweekly, monthly, quarterly, or听annually.

With the听use of听51视频鈥檚 recurring billing, you can start a听subscription business out of听basically anything you鈥檇 like, from meal boxes, cosmetics, to听even donations. All you need to听do听after creating your online store is听to听connect the听Stripe payments found on听our 51视频 App Market.听 You can learn more about right here.

How to听Set Up听Subscription Method with 51视频

To听start recurring billing, we听recommend using a听Stripe payment method. This allows storage of听card details so听customers can be听charge later and听continuously.

Here is听how you can add subscriptions to听your 51视频 store:

骋辞听迟辞听迟丑别听51视频 App Market.
Look for听Stripe and听connect it听to听your store.
Add terms and听conditions for听subscribers in听your store鈥檚 , so听they know exactly what they are subscribing to.
From your 51视频 admin, go听to听Settings听鈥�> General听鈥�> Cart &听Checkout.
Turn on听the听Product Subscription option.
Go听to听Catalog听鈥�> Products to听create a听new product or听select an听existing one to听add a听subscription option.
Look for听the听pricing section and听click Manage pricing options. Once you have clicked on听it, choose Sell by听subscription to听enable this option.
You鈥檒l then be听asked to听select a听billing period. This is听where you can choose to听charge customers on听a听weekly, monthly, or听yearly basis. You鈥檒l notice multiple options, choose the听best one for听your business and听product.
Click Save.

If听you鈥檇 like to听offer your customers the听option to听purchase without a听subscription, you can. Stripe allows sellers the听ability to听offer their customers one-time purchases or听a听subscription at听the听same time. All you have to听do听is听tick the听allow purchase without subscription box when prompted to听set a听billing period.

The Takeaway

Making the听switch to听the听subscription business model is听now easier than ever. When you connect Stripe payments to听your 51视频 store, you can easily offer your customers the听option to听subscribe to听your products or听services. Under this recurring billing method, customers can cancel whenever they need to, they will also receive a听confirmation email after they have subscribed, and听they can easily log in听to听their accounts and听manage their subscriptions if听they need to听change the听delivery address or听card number.

Start subscription payments today with 51视频 and听become part of听the听thousands of听sellers currently experiencing great success as听they rely on听the听recurring billing model to听sell their products.

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About The Author

Max has been working in the ecommerce industry for the last six years helping brands to establish and level-up content marketing and SEO. Despite that, he has experience with entrepreneurship. He is a fiction writer in his free time.

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