Category Archives: Recurring Billing

When Is It Okay To Set Customers Up On Auto-Renew?

bookkeeping-615384_1280Auto-renewing is an efficient way to collect funds owed to you from customers when they’re regularly using one of your subscription services. It is cost effective as it limits the amount of administrative tasks that you have to complete and lowers the chance your customers won’t pay on time. Both of these make it easier to predict your monthly cash flow.

However, it is not always the best option to set up customers on an auto-renew system immediately. Sometimes they might only want a taste of your services before committing or perhaps they only need your services for a short period of time.

Placing them an auto-renewal billing system might then annoy them and probably reduce the time they will use your services.

So when is it best to sign up to customers for an auto-renew? What should the criteria be when it comes to signing them up.

1. Regular Costs

One of the best measures is to check that your customers are on a regular payment plan. If you have a service like a membership site or a software program, which has a set price for usage, then your customers might be suited for auto-renew billing. This helps to prevent customers gaining access to your services when they haven’t paid.

It is also easier for your customers. If they know there is a regular fee, due on a specific date, then they can be prepared for the payment in plenty of time. However, to make this more effective, there are several best practices for your accounting system:

  • Send out a reminder to your customers seven to fourteen days prior to payment is required. This is to ensure they can find the funds to pay and makes it easier for you and them.
  • Don’t raise the price without informing your customers with at least one or two payments notice. This will give your customers chance to decide whether the value of your service is worth the price increase.
  • Don’t increase the prices too often. This can annoy your customers significantly and can result in an exodus of customers.

2. Set Product Amount

If you are offering a specific amount during each payment period, then an auto-renewal is normally acceptable. For instance, if you are an online accounting software provider, the customer has set expectations and you likely have a regular subscription price.

However, if you are an energy company or a food service, where your customers’ consumption will differ throughout the year, auto-renewal might not be the best option.

3. Period Of Renewal

One of the best advantages of having your customers on an auto-renewal system is that it saves you and them administrative time. If the period of your renewal is short, like once a week or month, then it would take a significant amount of time for you to administer manual payments – especially if you have numerous customers. This makes auto-renewal cost effective.

However, if your renewal time is once a year; you should ask your customers when it comes to their renewal whether they want to continue, instead of assuming it. This is because 12 months is a long time; your customers might change their mind and no longer feel that your services are valuable enough to justify the subscription fee.

Conclusion

Using an auto-renewal subscription system is one of the best ways you can manage your subscribers and ensure your customers regularly pay and receive your services. However, not all subscription services are suitable for auto-renewal billing and you need to check whether using auto-renewal is suitable for your business and 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.

The Power Of A Subscription Model For Online Publications

glasses-219734_1280The subscription business model is growing in popularity. Almost every industry sector is now represented by at least one subscription model whether it is men’s fashion, executive travel or organic food.

Yet there are also those industries that have been using the subscription model for a long time. These industries, like online publication websites, can teach those looking to utilise the subscription model some best practices.

In fact, online publication is a rather powerful business model.

Why Are Online Publications Perfect For the Subscription Model

There are two types of online publications: one which creates content for paying customers and one which creates content for advertising / marketing purposes. While the latter can also contain some premium content that can only be seen by paid customers – they are not always the same.

For example, companies that run blogs utilise the second version as these are free for visitors to read and are used to market the organisation’s credentials and expertise. However, newspapers, where you have to pay a monthly fee to gain access to the news, would be an example of a subscription model.

One of the reasons why online publications are so perfect for the subscription model is that they are easy to control. There are plenty of software options available for businesses that can restrict access to content online unless the individual has paid. Some software is clever enough to offer free trials to one piece of content based on IP addresses. This content does not need to be specified by the organisation but as soon as the visitor tries to move to another page they are prompted to a purchasing screen.

Why Do Customers Like Online Publications

A growing amount of our time is spent online. 20% of our time is spent reading content online, whether that is blog posts, news or articles. But one of the more interesting aspects of our behaviour online is that we like to read exclusive content – i.e. content that others haven’t had yet.

This is nothing new, exclusivity has been used as a marketing term for generations – but online publications can use this to sell subscriptions. By marketing their content as unique and that only a select few will ever get to read it – online publications can create hype about what they are selling and increase the value of the content. In some cases the content is nothing new and there are other free sources on the web where consumers can get the information. However, because of the terms being used and through clever marketing – the perceived value of the content is increased in the mind of the target user.

What Other Benefits Can Online Publications Generate

As well as appearing more valuable to customers, online publications automatically generate trust between the customer and content provider. This makes them particularly powerful influencers in the consumers’ lives. The content producer could therefore make a suggestion on the next best buy, perfect Christmas present or on other products and services that they sell and these will have a high chance of being accepted by the audience.

This makes up selling and cross selling very simple for online publications – which increases revenues and profits without having to take the expense of finding new customers in different markets. Finding new customers is more expensive than selling to existing ones, so this also increases the profits and can help cement the relationship between consumer and business.

How Much Content Is Needed For Online Publications?

Remarkably very little is needed for online publications. What is more important is that what you publish is of a high standard and branded. The better the quality of the content, the greater the retention you will have.

Conclusion

Subscription businesses offer you the chance to connect with an audience and open up opportunities for cross-selling and up-selling, which in turn are made easier because you are generally more trusted. If you are looking to start a subscription business, then consider your expertise and how you could turn that into an online publication.

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.

Will More Products And Stores Switch To Subscription Models?

The subscription business model is very innovative. But are more industries going to use it?

The subscription business model is very innovative. But are more industries going to use it?

Subscription business models come in a variety of formats these days. Whereas before you could only get a publication subscription or access to software for a regular payment, now businesses are looking into options of how they can offer some great products that are used regularly through the subscription model.

This shouldn’t come as a surprise to many who have studied the subscription model. Several years ago the firm Dollar Shave Club was founded. Their promise for men to receive their monthly supply of razors for just one dollar was a huge success and paved the way for other businesses to adopt the approach.

Yet it is often software companies, like Adobe, who receive the limelight when they switch to a monthly subscription model.

Is this because there are no other industry sectors offering subscription based services or because the large brands are stealing the headlines?

Various Businesses Already There

We have covered several blog posts where we’ve looked at some of the more surprising subscription business models. In these lists we’ve included executive travel, fine art, children’s toys and clothes. This seems to indicate there are relatively few industries which have yet to develop their own subscription models.

Clothing is a particular breakout subscription industry with many professionals having little time to go clothes shopping and liking personal shopper treatment.

Another is pet food. This is a very good sector as pet food is often used regularly and therefore demand can be determined easily by you and your customers.

Big Players Moving Into The Market

The move towards a subscription business is very active. Amazon is even offering subscription services for many of its products. For instance, pet food, cleaners and household products can be purchased on a regular basis through their system. You have the option to cancel an order, change frequency or even put it on hold if you go on holiday.

This move by Amazon is a clear indication that consumers are enjoying the flexibility and ease of use that subscription services offer them.

At the same time, businesses like grocery stores are also looking at offering subscription services. At one time, these vital services would only offer online shopping where each order would have to be entered individually and you had to hope a suitable delivery slot was available. However, there has been a move recently for them to offer the same spot to customers every week, for a set price.

The service is enhanced even further by the fact that businesses are offering customers the chance to select essentials that they place in their carts each week to be automatically selected. The benefits of this to the customer are huge. Firstly, it allows them routine while still being flexible and secondly, it saves the customer time by not having to select common items.

These businesses also gain significant benefits. For starters, it allows them to generate brand loyalty as many customers are unlikely to want to cancel subscriptions which make their lives so easy. Also, it helps businesses to forecast the expected demands which can lower wastage and save on costs.

Conclusion

The advantages of a subscription model for both customers and businesses are immense. This is why numerous organisations are moving towards this model in the hope of refining their business practices and growing their profit margins. It is highly likely, that over the next few years, that we will see significantly more industries adopt the subscription model as customers want to see their lives made easier and costs lowered.

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.

3 Security Challenges Web Apps Face In 2015 And Beyond

privacy-policy-510731_1280Ever since the internet was developed there have been hackers looking to steal the data stored online. For some it is a game: seeing how much they can disrupt the lives of others. Then there are the more troublesome hackers who want to financially benefit by collecting information and selling it on or by using card details to make rogue payments.

IT security firms fight a battle against these criminals every day. When a new virus or malware is developed; they are on the lookout to identify and contain it. Likewise, every time a new piece of software is developed, hackers search for security gaps to exploit.

2014 was the year of the hacker with high profile cases such as Barack Obama’s emails being hacked by a Russian group and the numerous hacks Sony suffered.

2015 is going to be no different, there is going to a battle for control of the data online and web apps will be at particular risk. So what are three of the biggest security challenges web apps will face this year?

1. Attacks Against Virtual Payment Systems

Over the past few years there have been a number of recent breaches where customers’ financial details have been stolen from retail databases. This has been rather embarrassing for the retail businesses.

Luckily these large breaches are often discovered early and action can be taken to protect the majority of the information stolen before the criminals can benefit. There is also the good fortune that cybercriminals sometimes collect information which is out of date.

Therefore, cybercriminals will want to steal information more regularly, in smaller batches and in real time. One of the best ways for them to achieve this is to attack the virtual payment systems.

Recently, examples have been identified where malware was used to steal virtual wallets through apps on mobile devices and computers. There have even been a few cases where bank payment systems have been compromised.

2. Open Source Software Gaps

One of the biggest computer security problems of 2014 was the heartbleed bug. The vulnerability came about from the security gap that was found in open source code. While the heartbleed bug happened last year, the problems with the code had been there for years; probably from the moment it was written.

The reason why it took so long for the heartbleed bug to be developed by criminals was not because it was a difficult security gap to take advantage of but because no-one paid much attention to code previously. This has completely changed and open source code is being studied by numerous people including cyber criminals.

Another problem is that we all believe that anything that has been around for a while, and has had no problems so far, must be free from errors. This is dangerous. Any system, no matter how old, could have hidden security errors that have yet to be discovered.

The only way to combat this is for brands to properly test, scrutinize and audit apps to check for gaps in their security.

3. The Wider Picture

The rise in technology is now producing some of the most talented hackers and cybercriminals that can infiltrate a system through various systems. However, businesses tend to focus their IT security on an individual threat (i.e. staff browsing the internet).

To protect their web apps, businesses need to protect their whole computer systems, not just small areas.

Conclusion

2015 is going to be another year of security breaches. Apps are going to be at particular risk this year. Only by considering the dangers and enacting plans to combat the dangers can businesses ensure the safety of their data and that of their 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.

How Apps Are Using Subscription Models To Increase Profit

iphone-410311_1280We normally think of the subscription model being connected to a business that offers software or content for a set monthly fee. Another common subscription model is the provision of goods for a set fee per month, for example, Dollar Shave Club. However, it is not just desktop websites or product deliveries that can make a profit from the subscription model and apps are now becoming a good source of subscription income.

The Growing Trend Of Apps

Apps are an effective medium for communicating with audiences because of their very nature, sitting on a mobile device, ready to be interacted with. This is why so many brands are now releasing apps to allow their target audience to be in continuous contact with them.

While many apps are free, there are numerous apps which have to be paid for to be used. There are also other apps which are free to download but require extra payment if the user wants to maximise their use.

Then there is the growing number of businesses who are seeing apps as a way to grow their profits by offering subscription services. One example is the New York Times that offers their crossword puzzle to subscribers for a nominal fee of $40 per year.

There are also game companies who require a monthly subscription to play their game.

Advantages

One of the biggest advantages of this model is that it provides another revenue stream for organisations and little effort is required to market the app. Anyone who regularly uses the product from the main business can be contacted and informed about the app and how they can gain access. And because they already use the brand, and are presumably happy with their service, they are more likely to make the purchase.

It also allows the business to market more of their products to subscribers by including responsive adverts in their app. For instance, the New York Times could advertise the latest news items that are available on their website or in their publications as the app is being opened. They could also include a ‘buy now’ link that will automatically charge the customer when they go to buy an electronic copy via their mobile device.

Finally, these apps can be used to acquire more information on users, which can be used in marketing campaigns. This can improve results and generate more revenue on other products / services.

Disadvantages

There is one major disadvantage to the development of an app and publication – cost. Apps can be very expensive to produce with some costing more than $5000 to develop before anyone can download it for use. In organisations with small margins, this might be too expensive. Then there is the new content that needs to be generated constantly for these apps (i.e. creating new crosswords). This can be expensive and lengthens the return on investment time.

There are also other costs such as upkeep for the app’s server to keep it running and constant updating of the app to ensure it works on the latest devices.

The Final Word

What businesses need to do when they are looking at developing an app is consider whether or not they can afford to make the app and keep it running. This can only be done by engaging with your main customer base and seeing whether or not they will be willing to pay a subscription for your app.

If you don’t do this, you could end up paying for an app and diminishing your business’ profits. Yet get it right and you could end up with a good ‘cash cow’ product that will propel your business to the next stage.

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.

Traditional Cable Companies Switching To On-Demand Subscriptions

children-403582_1280There has been a revolution when it comes what traditional cable companies are offering their regular viewers. Many television channels are now offering an on-demand subscription service where customers have to pay to gain access to TV episodes online.

While some of these channels are offering only catch-up, where recent episodes are available, others are offering exclusive content for their audiences. One such example of this is Nickelodeon. The children’s channel recently announced their Noggin app. This will be a monthly subscription service allowing children to watch old shows that are no longer shown on the main cable channel and feature new content.

It isn’t just children channels that are going that way. HBO Now is a new service with similar ideals. On this channel, programs become available to subscribers as soon as the episode starts to air on the standard channel.

In addition to this, the UK has seen a move by traditional companies to move towards a subscription service. ITV, one of the main UK television companies that offer 4 free channels, has just launched two new channels: ITV Be and ITV Encore. Both of these are subscription channels.

The Advantages Of This Model

The main force behind the move is purely financial. While TV shows are popular, watching television live is in decline. This is mainly due to the improvements in technology that have led to online catch-up and other online media.

This has created a problem for broadcasters as revenue from advertising has declined. Instead, there is more money to be made by advertising on digital media. At the same time, television companies can collect significant revenue from subscribers.

The Challenges

The biggest challenge for those channels that aren’t using adverts is will they generate enough income. A television show is very expensive. Games of Thrones costs $6 million per episode to produce. While this is significantly higher than other successful shows, Breaking Bad cost $3 million per episode and The Big Bang Theory cost just $2 million when it started out, it demonstrates how much, a subscription channel must generate.

It isn’t just about one of these episodes per week. It is a combination of several new episodes over a month. With HBO Now, it would take over 400,000 subscribers to pay for just one episode of Game of Thrones. While it is not subscribers alone who will be the main revenue stream for these companies, they will be part of the plans for these companies.

Yet, Nickelodeon has a good plan. By using old content that has long been paid off and made a profit, it can reduce the costs for the service over the week and therefore it will take fewer subscribers to make a profit.

Will These Channels Be A Success?

While it cannot be guaranteed that these channels will be a commercial success, there are signs that it is likely. Netflix and Amazon have demonstrated to the world how an online streaming subscription service can be an effective business model. Netflix earned $4.37 billion in 2013 and made $228 million operating profit. That is nearly enough to fund the first four seasons of Game of Thrones!

In fact, Netflix has shown that an online streaming service can produce original works with their highly acclaimed: Orange is the New Black.

But the greatest challenge will be whether these new digital channels will be able to demonstrate to viewers why they need to pay for one channel, when they could gain access to more content via the big streaming companies. If they can’t, they will need to rethink their strategy. If they can: we will probably see numerous more channels like this.

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.

3 Businesses Using Subscription Models You Might Not Expect

ID-100252383The subscription business model is now one of the most popular for start-ups and existing companies. It offers organisations various advantages, including flexibility and deeper customer relationships. They also allow businesses in traditional pay per use or pay once use forever industries to distinguish themselves from the competition and attract attention to their brand.

Consumers are also seeing the benefits of using subscription services in place of pay-per-use services with many consumers flocking to clothing subscription businesses.

In most cases, subscription businesses are able to offer an affordable monthly payment for products that would otherwise need a large upfront payment. However, some subscription businesses offer services without any fees. Hootsuite and Box of Awesome are two businesses which use this model. This helps to sell their products and encourages consumers to buy other services or premium memberships.

With the success of various businesses moving from traditional business models to the subscription business model and the benefits they’ve found, there have been a lot of innovative business ideas. Here are three businesses using the subscription model that you would not expect.

1. Art In A Box

You wouldn’t expect that art could be so readily provided by mail, but in the US, Art In A Box is one that is moving into the art business environment.

The idea behind the service is fairly simple. A subscriber signs up to their services and goes to a members’ area where they complete an online form. The form includes three adjectives to describe the taste of the member, what media they prefer and how frequently they would like to receive art.

Then art is selected by the company and sent out at the times specified by the subscriber. This art is for them to keep forever.

Art In A Box delivers across the world and has numerous artists who provide them with work.

2. MilkMade Ice Cream

When you think of food subscription services you might believe in organic fruit and vegetable deliveries, healthy foods and even meat. These are all the common ideas. However, I bet you wouldn’t have thought of ice cream by post. The thought of melted deliveries probably plague this subscription service regularly.

However MilkMade Ice Cream is offering craft ice cream that is home made and delivered to their customers.

The company is rather unique. Each month they craft two unique flavours and ensure they are styles similar to those from a top restaurant. These are then hand delivered to their customers through a network of trusted individuals.

They have supplied various unique flavours in the past; including Pop Tarts Ice Cream, Key Lime Pie, Maple Pancake, Salted Watermelon, Strawberry Shortcake, Spiced Apple Cider Donut and White Russian Chip.

3. H Bloom

Making your office or home more attractive with flowers can be difficult. Sometimes you are faced with problems such as poor quality or wrong colours when you are at the gas station.

H Bloom is trying to change that. Founded in 2010 by Bryan Burkhart and Sonu Panda, H Bloom has quickly become the world’s fastest growing floral and plant service. Their expert designers craft high-quality bouquets that are delivered by hand to the customer, whether they are for an individual or a business.

Deliveries can be set up at a frequency that is suitable for the customer. Weddings and gifts can also be catered for by the organisation.

Conclusion

There are numerous new industries that are taking advantage of the subscription business model. We’ve listed just three interesting and unique subscription businesses and perhaps next time your business could be one of the three.

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.

Image courtesy of 2nix at FreeDigitalPhotos.net