Category Archives: Recurring Billing

5 Noteworthy Examples Of Subscription Business Models

“Image courtesy of Mister GC / FreeDigitalPhotos.net”

“Image courtesy of Mister GC / FreeDigitalPhotos.net”

There are many excellent examples of good subscription businesses trading on the market. Some of these are notable because of the uniqueness of their products or because of their financial performance. By learning about successful businesses, you can determine trends and apply those aspects within your own subscription business’ strategy.

Here are five of the most noteworthy examples of subscription businesses and what you can implement from their strategy to make your business a success.

1. Food4Thought

Healthy eating is one of the growing trends when it comes to the consumer market. It has long been established as a way to improve productivity and lower stress. One of the worst areas for bad eating habits has often been found to be at the office desk or other workplace.

Therefore, there are a number of businesses out there that are offering healthy eating options to consumers to replace fast food lunches and quick snack options. One of these is the Toronto based company, Food4Thought. Unlike with other food delivery companies, this supplier concentrates on the business market, offering offices a fresh delivery of healthy snacks. This ensures that they have large value orders that can better absorb the costs.

2. Blissmo

Low cost subscription options while providing high quality niche products is the strategy for this subscription based business. The service is for all sorts of responsibly developed products to be delivered regularly for $10 per month. The products being shipped differ from month to month and this creates a strong sense of mystery and a high appeal to customers.

This strategy has helped the brand to stand out from the crowd and offer it distinction within a highly competitive market, allowing it to grow quickly. There have been other businesses that have followed its example, although with some minor changes.

3. Hootsuite

This popular social media management tool has a strong subscription model. The basic package is free, like with many social media networks that offer premium packages. On this free level, there is limited data analysis and few profiles that can be attached to the profile. This can make the tool rather limiting for those who want to control everything from one screen.

On the other hand, their premium packages (named pro) are highly adaptive and contain significantly more features and data analysis. Also, because the technology is already in place and there are no physical goods – the paid membership offers a lot of potential profit to the organisation.

4. Hoseanna

Hoseanna was able to satisfy a customer through a novel approach when it created its stocking subscription service. The organisation, which provides women’s leg wear on a regular basis, was founded on the realisation that stockings and tights tend to have a fairly limited shelf life.

Their marketing is aimed at professional women, allowing them to never be without a high quality pair of tights when going to the office. The growth of the business was fuelled by the low economical committal required by consumers and the inexpensive product on offer.

5. Box of OMG

What is unique for this box? It is free for consumers. The revenue for this company is collected from marketing the unique products that are placed within each box and sent out. The box is marketed to adults as ways to entertain their children after school and during school holidays. Each box contains a variety of items including: books, magazines, toys and sweets.

The idea is that those who receive the box (each quarter there is a lottery to receive a box) will post reviews for the items inside or spread word about them through their social groups and create anticipation and attention for the brands.

Conclusion

There are many different businesses offering products and services through the subscription model. Not all of them charge the receiver any money and some have unique approaches to deliver or a highly defined market. Using these five unique and high performing businesses as examples, you can discover methods to create and promote your subscription business.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

7 Common Challenges With Subscription Model Businesses

Image courtesy of renjith krishnan at FreeDigitalPhotos.net

Image courtesy of renjith krishnan at FreeDigitalPhotos.net

Having a subscription business is one of the best to run. They offer you a significant number of advantages and are a great way for consumers to gain access to software, information or products that might usually be out of their price range.

Yet there are a numerous challenges that businesses operating under the subscription model face. Here are seven of those challenges.

1. Customer Management

Subscription businesses tend to have a significant number of users at any one time. This can be hard for the business to manage with all the customer records that are needed. An inaccurate customer management database can damage relations because mistakes are made. These mistakes can be down to staff not knowing what level of service customers have, whether they are on a trial or when their subscription period ends.

To avoid this, you need to utilise an effective customer database that can categorise where in the sales process an individual is and previous interactions they have had with your company. It should also track the current status for a customer’s membership.

2. Automatic Invoicing

With numerous customers signed up to the services of a subscription based business, manual invoicing becomes troublesome. Invoicing becomes an even bigger problem if you have customers on different payment options, subscription levels or with add-ons.

One of the best ways to solve this is to use an automatic invoicing system that can use your customer database to automatically generate and distribute your invoices. This can also be implemented when your customer purchases a subscription for the first time and for when customers cancel their subscription.

3. Secure Payments

One of the biggest challenges subscription businesses face is the security of their customers’ payments. If subscription businesses cannot offer guarantees that their payment system is secure, customers are unlikely to sign-up for membership.

4. Pricing Plan Management

Most subscription businesses have different levels of service. Dollar Shave Club for instance have three different types of subscription and some SaaS companies have many more. Different subscription levels are a great business strategy and likely to grow your business as it offers more affordability or choice to the consumer.

This can make recurring billing difficult to manage. To combat this complexity, you need to utilise an effective recurring billing software program that will manage pricing changes with ease.

5. Failed Transactions Management

With so many customers subscribed to the business, it can be difficult to notice when a failed transaction has taken place. It is an ineffective use of your time to go through the list of transactions manually to check everyone. This task is almost impossible if you have hundreds or thousands of customers.

Therefore, businesses need a way to automatically highlight when transactions have not been processed and to inform customers of failure. From there, the payment system can automatically resolve the issue by finding a solution for payment to be made or to cut off the customer so they don’t get access to the products / services until the payment has been made.

6. Discounts And Promotions Management

To grow, subscription businesses may require special promotions and discounts to entice target audiences to sign-up. This can be tough to manage manually and would require significant work that can make implementation financially ineffective. By using an effective subscription billing model, businesses can track the number of discounts redeemed and the effectiveness of the marketing efforts as well as seamlessly manage the billing.

7. Multi-Currency and Language Support

While some subscription businesses only offer their products to customers in one country, those offering subscription or content services can often be global. This can cause numerous problems with billing customers, whose charges may fluctuate with exchange rates or can’t read the bill because of language problems.

A good subscription billing system should be able to manage the invoicing no matter what country the customer is located.

Conclusion

There are numerous challenges that subscription businesses face while setting up their services and maintaining their customer relations. One of the only ways that businesses can overcome this is by using an effective recurring payment system that can address these issues.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

Getting Your Customers To Understand The Convenience Of Subscriptions

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Subscription businesses are a great model because they offer businesses a significant amount of benefits while also providing a high degree of customer satisfaction and affordability to customers. There is a problem however; many customers do not see the benefits of a subscription business and this can hold them back from joining your business.

The biggest benefit of course to customers is convenience, and customers respond well to businesses that offer this. Therefore, to attract more of your target audience to convert to subscribers, you need to make them understand the convenience of your subscription.

This can be more difficult than selling the benefits of your service, which might be obvious. So here are a few points you can highlight to your potential customers on why a subscription is beneficial.

1. Customers Know When The Payment Is Due / Being Processed

All your subscribers are likely to have a set date in which they pay for their subscription. This date is set each month and does not change. This is one of the most convenient aspects of a subscription service because it allows customers to plan their finances better and ensure they have enough money in their accounts when it is needed.

Another benefit gained from this convenience is that customers need not worry when they are going to receive their bill and panic when it arrives. By knowing well in advance when payments will be due, customers are more relaxed and have a happier customer experience.

2. Customer Know How Much Each Payment Is Going To Be

As your subscription payments are all going to be the same, unless they purchase one time add-ons, then the customer is always going to know what the price is going to be for the products they have bought.

This can be a great convenience as it further supports their financial planning and again stops the panic when the bill comes in. Also, because the payments are regular, there isn’t any negativity when the bill comes. Customers will often try to reduce bills if they are issued periodically and are not set, partly because they want a good deal, but also because they are often surprised about the amount being charged.

Therefore, you can save yourself time and improve opinion of your business by highlighting the set price charged per month.

3. It Saves Time

Receiving and paying an invoice periodically, uses up the customers’ spare time and if it is a business client, they are likely to want to spend more time being productive than completing administrative tasks that are unnecessary.

The same can be said with customers. Most people today live a very busy life and it is important that you highlight to them that an automatic payment for a subscription service will save them time.

4. It Costs Less

Most subscription businesses offer reduced rates for those customers that pay a subscription automatically. This is because it costs less to process these payments and therefore, the business can afford to take a small cut to entice customers.

You need to highlight this to your customers who are likely looking for a good deal and will probably assume you are still charging them for payment processing costs.

Conclusion

Your customers might not understand the convenience of a subscription based service. Therefore, you need to explain to them how it can save them time, stress and money while being good value for money and excellent service. Use the above four points to help you create strong arguments why your business’ subscription service is good for your customers and see the number of subscribers increase.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

4 Innovative Subscription Business Models

Image courtesy of imagerymajestic at FreeDigitalPhotos.net

Image courtesy of imagerymajestic at FreeDigitalPhotos.net

There are many different business models available for entrepreneurs who want to earn money by selling a service or product. The subscription business model is one of those models. Most subscription business models work by the business taking a regular payment from the customer and then giving them access to resources or a computer program for a set period of time.

However, these aren’t the only subscription business models that are available. There are numerous other subscription models that entrepreneurs can use to deliver their services and products. Here are four of the most innovative subscriptions available and what makes them unique.

Personal Styling

Today everyone leads busy lives and time for shopping and self-styling is getting harder to find. For some this can be an excuse for not going shopping too often and this is why the personal stylist has gone online.

Stitch Fix combines e-commerce with the in-store experience of retail shopping and personal styling. They send the customer five items they’ve handpicked for them based on their answers to a lifestyle and fashion questionnaire at the beginning of the subscription.

The customer can then try on the clothes sent and keep only what fits and what they like. Feedback is also passed back to the stylist, so the next box can be tailored to be more in tune with what the customer likes.

Shaving Gear

One of the most popular and recognised subscription services, which is slightly unorthodox, is the Dollar Shave Club. The service promises to deliver blades to the customer’s door for just one dollar a month. There are other options available; but, the service is pretty much the same.

In addition to the blades, each customer gets a free handle and has the option to purchase add-ons such as shaving cream and moisturiser.

The brand entered the market with an incredible advert that broke with tradition and went viral online. Since then, the subscription service has gone from strength to strength and has started new lines and improved customer options.

Kids’ Toys

Box of OMG is probably one of the more unusual subscriptions services available online. Not only do customers not have to pay a subscription to receive anything, but their contents are not guaranteed.

The service works like this: a customer subscribes to the site via email or a social media account and every quarter, the company sends out a limited number of boxes randomly to those on the list (you aren’t guaranteed a box each quarter). Subscribers can increase the chance that they will receive a box by signing up friends, advertising the brand on social media and competing in other activities on the site.

The boxes are full of toys, comics, snacks and other items to keep your children happy.

Travel Clubs

Netjets is probably the most unique business models on this list. For a hefty subscription fee, customers can choose how many hours they wish to fly per month and then reserve that time as a share of the private fleet maintained by the company.

This can be an effective way to reduce travel costs for businesses that travel regularly. The same can be said for public figures.

There are also similar options for cars.

Conclusion

There are a number of options for those looking to start a subscription business. The only barriers to entry are legality and your imagination. Consider how you can convert your business into a subscription business or what new business you would like to start. As recent years have shown, there is a growing demand by customers for this model.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

Common Customer Questions About Subscription Programs

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

The use of the subscription business model is growing. Many businesses see this as a way to offer cost effective, but high quality, services to their customers. As with any business model, there will be some frequently asked questions you customers will want to know the answers for before committing to any of your packages. If you answer these well; then you can increase the sign up for your services.

So what are the common questions and how can you answer them?

How Much Is The Cost Of The Subscription?

This is probably one of the most common questions customers will want to know. Don’t be tempted to send them to your subscription page. Instead, detail the costs of each of your packages, the period (i.e. weekly, monthly, annually) and how payments can be made.

What If I Want To Upgrade / Downgrade My Subscription?

There are a number of different reasons why someone might want to change their package with your business. For instance, they might have an increase in the traffic to their website and need a larger package or they might be downsizing their staff and require less licenses for your software.

Whatever the reason, they are going to want assurances that they can change their package easily and with no heavy costs. Detail carefully how long it takes to make a switch and when new charges will apply from. At the end include a link to making the request for upgrading / downgrading a package.

What If I Want To Cancel My Subscription?

Although many of your customers aren’t going to cancel their subscription in the near future, they are likely to want to know the details encase they want to later on. The information they want will include:

  • What notice do they have to give you?
  • What are the costs for cancellation?
  • When will their access be removed?
  • What happens to any outstanding balance?
  • How do they notify you of their wish to cancel the subscription?

By answering these questions you can demonstrate you are a legitimate company and assure them of your professionalism.

How Are Extra Fees Collected?

This is one of the most important questions if you offer add-on services that can be bought at any time. Customer will want to know whether they are provided an invoice for them to pay separately or whether the funds are taken directly from their account immediately or on the next subscription payment date.

What Does My Subscription Include?

Every customer will want to know what each package gives them access to. However, if you operate a number of different packages, this could become a long answer which many people would not read. Therefore, it is probably best if you describe the basic subscription for your readers and then direct them to your packages page for further information on other packages.

How Can I Contact You?

If you don’t provide this information to your customers they are unlikely to think they cannot contact you if there is a problem with their service. This can potentially deter them from using your services. On every page, and especially the FAQ page, you should include a telephone number and an email address.

What Is The Minimum Contract Length?

Customers want to know they won’t be tied into a long term contract that doesn’t give them flexibility. Therefore, let them know about the minimum term and what will happen if they wish to leave your service before that period has ended.

Conclusion

Your FAQ section on your website is a perfect opportunity to demonstrate your professionalism. Use our guide above to start creating your FAQ list and what to say to your potential customers.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

Should You Increase The Price For Existing Customers?

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

At some point, your subscription business is likely to have to increase prices. Whether you apply these higher prices to your existing customers, in addition to new customers, can be a difficult decision for you and your management team. Some businesses (like Amazon Prime) do change the subscription charges for their existing customers. Others, do not unless the customer is coming up to a renewable period.

Whether you increase the charges for your current subscribers is a decision that is very specific to your business. There are several different factors that can impact your decision, here are three of them:

1. Why Are You Increasing The Price?

The first consideration should always be to identify why you are increasing your subscription prices. If it is because you are finding demand extremely high and you would like to increase your revenue, then there is no necessary reason why you need to increase prices for your existing customers. That isn’t to say that you shouldn’t – just you should have another rationale.

On the other hand, if you are increasing prices because the costs to deliver your service have risen, you might need to. You first need to look at your profit margin on providing your service. In your cost analysis, include the customer acquisition cost as well as the expense to maintain and deliver your service.

If the profit margin is too small you’ll need to increase your subscription prices.

2. Have You Added New Features / Changed Package Deals

Sometimes you have to increase prices because you have made changes to your packages. If you’ve added new features to existing packages, and you’ll be offering those same features to your existing customers, you should increase the price for your current customers. Otherwise new customers might be upset that your current customers are getting the same deal for less money.

Therefore, you need to consider either raising the price or keeping them the same for new and old customers the same.

If you’ve changed the package deals so that they are completely new, rather than attached a new feature to current packages, then you have a different scenario. You could keep your current subscribers on their old pricing plans while moving new customers to the new pricing plan. Then as renewals come up or customers want to upgrade / downgrade their plans, you can move them onto the new pricing structure.

3. How Will Your Customers React

Another consideration is whether your customers will abandon your product if you raise the price. This might be the case if you have done several price increases in recent months or you have made promises not to increase the price.

However, there is limited evidence to suggest that rising prices will force long term customers to find alternatives. In fact, many long term customers often retain their membership because they know the benefits and value of the service you provide.

You should also be careful as to whether new customers will be annoyed that old customers are getting the same deal but with lower prices. If they found out, perhaps because they were referred by a friend, they might abandon their subscription.

Conclusion

When you need to increase the price of your subscription service you need to think very carefully as to whether you need to raise the charge for your current customers. There are some factors to consider such as why are you increasing the price, what is your profit margin and how will they react. The answer to these questions will tell you if increasing the price is right for your business.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.

How To Create A Website Pricing Graphic

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Creating the perfect website pricing graphic is a way for your website to achieve a better rate of conversions. A good pricing table is perfect for businesses offering subscription services as it allows potential customers to easily compare the packages you offer.

However, creating a pricing table is not easy. There are several design elements to consider so you effectively communicate information about your packages. So what are those design elements you need?

Limit The Information

You might assume that the more information you place within your table the more impressive and convincing it would be for potential customers. However, the more information within the pricing table, the larger the amounts the prospect needs to read and process.

If your customers can’t scan the information easily, they aren’t going to be able to compare subscription options. Also, too much information means that visitors are less likely to remember which plan the features represent.

To avoid this use simple 3-5 word sentences in each row or a tick system.

Demonstrate Differences

When a customer is viewing your different subscription options, they are looking for what sets each plan apart. Therefore, communicate how each plan is different to the others. If there are similar elements to your various pricing points, include those at the bottom of the pricing table while leaving distinctly different elements towards the top.

Ensure Your Pricing Stands Out

Potential customers want to see the price of your products when they visit your services page. Many businesses leave out the price when designing their pricing tables. To make your price stand out better you need to choose a different font and perhaps use a different colour. Orange works well as a way to attract the attention of the visitor.

You should place the price at the top of the table so the customer knows what it is prior to reading the product descriptions. If you have a long list of elements to your products, you can always include the price at the bottom of the table again, as a way to remind the customer.

Limit Visual Aids And Colour

Many designers think using a variety of colours on their pricing table will attract visitors. Often this is wrong because too much colour is used and in the wrong places. This can confuse customers and lower the conversion rate of the pricing table.

The most common mistake is placing red crosses and green ticks upon the page. Although this design makes the product elements stick out, they also make the pricing table too crowded and distract from the main message.

Use Illustrations To Demonstrate Differences

Some of the best pricing tables have images to demonstrate the differences between plans. For instance, different size boxes to represent the various levels of service offered.

One of the things to be careful of with this is to make the illustrations too complicated. Keep them clean, simple and easy.

Consistent Design

Your entire website should have a consistent overall design. The same should apply for your pricing tables.

Highlighting

You want to highlight your best plan for your customers. The highlighted plan could be in a different colour, bolded or ‘pop out’ when the cursor hovers over the plan. The plan you want to highlight could simply be the one that the visitors’ cursor hovers over or a particular plan that you feel is the best because it is more popular or offers the highest savings.

The one thing to avoid is highlighting the most expensive or cheapest plan. This can seem biased to your visitors and lower the conversion rate.

Conclusion

Using the above best practices, you should be able to create an excellent pricing table that can communicate the differences for your products and be easy to understand for your visitors. Then, with this implemented so it matches the basic design of your website you can start to see an increase in your visitor conversions.

Do you need recurring billing and subscription management software? Contact one of our experts at info@fusebill.com, call or check out the Fusebill free trial.