7 Lessons From 7 Subscription-Based Online Businesses

"Image courtesy of Stuart Miles / FreeDigitalPhotos.net"

“Image courtesy of Stuart Miles / FreeDigitalPhotos.net”

There are many advantages to owning and running a subscription based business. However, there are also pitfalls. Here are 7 lessons from 7 subscription based businesses to keep your business moving in the right direction.

1. Remember Your Customer Acquisition Costs (Hubspot)

A subscription based business is excellent for generating revenue on a consistent basis. However you must consider the customer acquisition cost in comparison to your monthly subscription. For instance, if you charge customers $20 for being a member to your site but it costs $50 to acquire in the first month, you have a $30 deficit.

In the long run, if the customer stays for at least three months you’ll make a profit. However, in the first month you are making a loss of $30. For one customer that is nothing, however say you have 1,000 new customers in your first month then you’ll have a $30,000 loss. If you achieve the same results in the next month you’ll have a $40,000 loss. You would eventually breakeven in the fourth month.

This scenario doesn’t count for any other costs either. Therefore you must ensure that you have the capital saved to acquire customers.

2. Consider Your Customer Successes (SalesForce)

Any subscription business depends on the customers renewing their contracts or subscriptions. Therefore your business needs to support the success of your clients and if they see the value of your business and are satisfied with your services they will continue with their membership.

You can then implement a pattern where you cross or upsell to your customers.

3. Get Your Marketing Right (Andrew and Daryl Grant workshop)

If you want people to subscribe to your membership site you have to get the marketing right. There are several options for you to consider with this. Many people think of social media, pay-per-click (PPC), affiliate programs and blogging.

Each method has distinct advantages and disadvantages. Consider which one will be best to communicate with your audience and concentrate on it, with perhaps one or two other methods in a smaller role.

4. Don’t Put Off Until Tomorrow What You Can Do Today (Writers’ Huddle)

Ali Luke has run many membership sites which take a monthly subscription. At first Ali was reluctant to setup a site until confident in the amount of content she had and when she felt ready. However, she states this was a simple mistake.

Her advice is always to start the subscription as soon as possible because you’ll never be fully ready for what awaits you.

5. Price Yourself Right (Blog Mastermind)

You have to carefully consider your pricing point. Certainly you can have a look at your competitors. However this doesn’t always provide you with the full picture. For example, some membership sites can have similar content but charge drastically different monthly fees.

Therefore try testing out a few price points and see what level of conversion you get. The price point is all about what value our customers place on your service.

6. Not actively developing your product in line with market demands (MySpace)

Even though MySpace is free for users, it is still has the same functions of a subscription based business. Therefore we can learn from one of their biggest mistakes: not developing the product to meet customer expectations.

MySpace was one of the biggest social media networks very early on and was even poised at one moment to buy Facebook. However, that deal fell through and Facebook continued to develop in line with what customers wanted. The end result was that users left MySpace never to return and the value of the business has plummeted.

7. Selling to Strangers (http://gihanperera.com)

One of the reasons why subscription sites work is that users trust the subscription site. Strangers however do not have that trust with your business and therefore selling to them is almost pointless. If they do subscribe they are likely to be short-lived.

Therefore ensure you build a relationship up with your clients before you ask them to subscribe to your business.

Owning a subscription based business can be lucrative. You can generate a steady stream of income, create customer loyalty and sell other products and services to your members. However, running a subscription service isn’t always easy. Only by studying the advice from others, can you avoid common mistakes and have a better, more profitable 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.

The Psychology Of Auto-Billing Your Customers

"Image courtesy of Stuart Miles / FreeDigitalPhotos.net"

“Image courtesy of Stuart Miles / FreeDigitalPhotos.net”

Auto-billing or automatically invoicing your customers can have a significant effect on your business. Many businesses use this billing method to save time and have their payments processed more efficiently, these often include businesses which provide regular and standard services to their customers.

But how does auto-billing affect your business and customers? And how can you make the system more effective for you?

1. Customers Don’t Like Surprises

Customers don’t like unexpected bills suddenly arriving. Auto-billing works around this by giving a set date and an amount which the customer can expect to pay. With this information your customers can plan their finances so they have the funds necessary to settle their accounts.

Being prepared will allow the customer to feel in control. You’ll also find because they are expecting the bill they will be more accepting and less likely to challenge any aspect. Therefore you can save time with customer service.

This can however backfire when your customers have used more than they expected and as a result receive a higher bill. If there is a possibility that this may occur, then you need to ensure there are several elements within your billing process including:

  • Careful monitoring so you can show the customer their usage and where extra charges have been incurred.
  • A period of warning so the customer can take action either by speaking to you directly about the extra charges or by ensuring the extra funds are made available by the payment due date.

2. It Builds Trust

Building a strong relationship between you and your customers is essential for retaining them in the long run. Having a reliable billing service allows the customer to build trust in your brand. Customers are more likely to retain the services of brand they know and trust than move to a competitor even if prices are lower.

Therefore as a business, you need to ensure your auto-billing is consistent. Have your bills go out on the same date every month, probably one of the better days for this would be the 1st, and avoid the 29th – 31st of months.

3. Auto-billing Means Fewer Mistakes Via Human Error

Some of the biggest mistakes made on manual invoicing are simply caused by human error. Auto-billing removes the human element from the system and therefore the chances of this is less. With fewer mistakes on invoices, customers will see your business as more professional.

For this to become a better asset you have to ensure your monitoring system for u

sage is reliable. A good performing monitoring system will mean less customer enquiries on their bills.

4. It Gives You More Time To Delight Your Customers

Without having to manually calculate and process invoices you can assign your staff to other tasks. This can include other productive outlets, to provide add-on services to surpass your customers’ expectations and again retain their loyalty.

You will also find that because there are fewer mistakes, you will be fielding less billing enquiries and you will also feel more efficient when you don’t spend hours calculating and forwarding bills on to your customers, giving you more freedom to spend time on what you are good at.


Auto-billing can be a great process to start using in your business. It can help you to achieve a better relationship with your customers and allow you to spend more time on performing the tasks you are best suited for. Therefore review your business’ invoicing system to see how you can set-up and implement an auto-billing system.

Do you need recurring billing and subscription management software? Call or email one of our experts at info@fusebill.com, call 888.519.1425 or check out the Fusebill free trial.

4 Invoicing Tricks For Getting Paid On Time By Your Clients

Image courtesy of hin255 / FreeDigitalPhotos.net

Image courtesy of hin255 / FreeDigitalPhotos.net

Getting paid on time is essential if you want to run a successful business. Having to chase payments which are not coming in on time from your clients is an ineffective waste of time and costs your business. According to research conducted in 2012, small business owners are being crippled by $1.2 billion worth of late payments.

Therefore you want to ensure that you employ effective methods to guarantee that the majority of your clients are paying on time.

Here are the top four tricks you can use in order to get paid on time:

1. Establish Clear Payment Terms at the Start of the Contract

Ensure that you have the payment details organised with the client when you create the initial agreement. In this document clearly state both the time the invoice will be sent and the date on which it is expected to be paid by.

It is also a good idea to include in this document penalties for late payment.

If a client does not pay on time then you can show them the clear terms of the contract.

2. Enforce Late Penalty Charges / Early Payment Discount

Sometimes you have to resort to late penalty charges in order to ensure you are getting paid on time. Laws vary between countries in regards to what you can charge. Some legislation allows you to charge interest on what you are owed.

This might not stop a late payment in the first case, but if you are strict and show that you are willing to charge a late penalty the first time round – a second late payment is unlikely to occur.

On the other side, you could always offer a small discount for those who pay by a certain date. Companies are always looking for ways to cut costs and therefore by offering a way to do so by paying on time will create an attractive proposal.

3. Make Sure Payment is Received Before You Deliver the Final Product

Once you have completed the project, hold back enough and ask for the final payment before you deliver the remainder. Some small business owners think this is rather unprofessional, but there are a number of cases where the owner of a small business has given over the final product only for the payment not to be forthcoming.

Some technical businesses can get round this by including a shut off switch where they can stop the use of their product if payment is not made – but for others sometimes having a reassurance of the final payment can be a useful tool.

4. Recurring Billing

Sometimes the best way to ensure you are paid on time is to switch to recurring payments in which your clients will set up and make regular payments for your product / service. This can be easily arranged and you can stop work at any time should a payment be missed.

This is an excellent method if you provide a regular service for your clients and it makes it easier for your clients to know exactly what they have to pay and when. The recurring billing can even be setup so that it is done automatically.

There are a number of different options for you to ensure you are getting paid for the work which you have completed. With careful planning you can reduce the number of clients who fail to pay for your products, but also make sure you have clear guidelines in place on how you will respond to those who do not pay on time, to avoid its re-occurrence.

Do you need recurring billing and subscription management software? Call or email one of our experts at info@fusebill.com, call 888.519.1425 or check out the Fusebill free trial.

Is A Free Trial The Right Strategy For Your Company?

"Image courtesy of Stuart Miles / FreeDigitalPhotos.net"

“Image courtesy of Stuart Miles / FreeDigitalPhotos.net”

There are number of organisations who entice new customers with the promise of a free trial. For some companies this can work really well as a marketing option. For others, the strategy is not very effective and can cost the organisation money.

To decide whether a free trial is right for your business you need to be aware of the advantages and disadvantages of the free trial model.

The Advantages

A free trial has some good benefits, not just for the user, but also for the business.

While the user benefits from having access to the full product for a period of time, the business benefits by being able to demonstrate how useful its product can be. This means that while the user is making use of your product, they are also becoming more dependent on your product.

Therefore when their free trial ends, the user is more likely to notice the absence in their day-to-day lives than if they never had access to the product in the first place.

Another benefit for your business is that by offering a free trial you are ensuring that users are investing time and energy in getting to grips with it. People don’t like to see wasted time or effort so they are more likely to purchase the full product when the trial ends.

The Disadvantages

A free trial requires you to make a bigger initial investment to keep track of those who have signed up for it. Otherwise you could lose potential paying customers if you aren’t following up on those leads.

Also you can face the prospect that your free trial will turn away some customers. This is because a free trial generally requires significant amount of information to be provided by the user to access the product. This information, whether it includes details of a credit or debit card or not, is considered a block. If the user doesn’t like the block they won’t sign up. On the other hand, any user which does enter in the information is significantly more likely to purchase the whole product after the trial.

Is Your Product Feasible?

One thing you should also consider is whether or not your product is feasible on the free trial business model. If your product can be used on a regular basis then it is likely a good fit. However, if you business has a seasonal or irregular use, customers could use the free trial to get the use out of the product they need during a certain period and then leave without paying anything.

So ensure there is a long term and regular use for your product before considering a free trial.

Even if a free trial is not right for your product there are other options. One other option is the freemium. These have several good benefits for a business which include:

  • A high visitor to sign up rate.
  • The likelihood of a larger audience.
  • Allows risk free testing of product features.
  • Allows you to test referral programs.
  • The ability to test upgrade hooks (entices the user to upgrade their membership).
  • You’re a more attractive acquisition target (the number of users can be a huge influence on whether big companies will want to buy your company and on the value they determine your company is worth).

These benefits can outweigh the best of the free trial and so might be something for you to consider. But again it is a question of looking at what you have to offer and how the consumer can use your product. Then you can decide which model is best for you.

Once you have made that decision you can really push forward and bring in a number of users to try out your products and gain more paying customers, increasing your revenue and sales.

Do you need recurring billing and subscription management software? Call or email one of our experts at info@fusebill.com or 888.519.1425. Or, check out the Fusebill free trial.

6 Subscription-Based Business Models Gaining Traction In 2014

"Image courtesy of Stuart Miles / FreeDigitalPhotos.net"

“Image courtesy of Stuart Miles / FreeDigitalPhotos.net”

Many businesses are now turning to the subscription-based business model to gain regular income from their customers. Everything from online magazines to cosmetics, are being sold by such a model and therefore you need to consider whether or not your business could implement one today.

A subscription-based business has several benefits which include:

  • A positive cash-flow: consumers pay up-front to receive their goods. Therefore you aren’t chasing invoices.
  • Higher profit margins: a subscription-based business can really cut down on some of the front end sale costs which are associated with a one-off sale.
  • Reliable income: most businesses which run a subscription-based business can predict what they are going to receive within 3% each month.
  • Effective planning: with a regular and stable consumer base you can plan more effectively on your costs such as personnel and supplies, nearly eliminating waste.

Could you have a subscription-based model in your business? Here are six models which are gaining traction in 2014:

1. Application

An application subscription-based service is unique and one which is available through applications on mobile devices such as Smartphones or through a website. The consumer pays up front for the use of the application which they can store information on, perform calculations and / or search for information on. An example of this model would be Hoover.com.

There is often no content, other than marketing, available to non-subscribers. Although sometimes a stripped down or reduced application is available for free users.

2. Reference

A reference subscription-based service is often confused as being a magazine, but yet it is not exactly that. A reference website is essentially the online version and replacement for the printed reference books which would be found in many libraries. New content is regularly placed upon the website for the consumer to access.

Consumer Reports is an excellent example of this business model. Although some content is free, you need to pay to gain access to the majority of the content over the website.

3. Membership

A membership website is a simple business model where a consumer buys a subscription to have access to certain features. Sometimes there is a free membership on offer which gives reduced services, some do not offer this. These are great if you have information and content to regularly give to your consumers and tools which can really help them.

Job sites and social media management websites are very common with this type of subscription-based service.

4. Newsletter / Magazine Subscription

A consumer who subscribes to a newsletter or magazine subscription will expect to receive a regular digital period which will provide excellent information. There are subscriptions for all sorts of magazines ranging from common hobbies to business magazines.

The content within this subscription has to have real value to the reader. There is often a free area which concentrates on the benefits of being a subscriber and subscribers are often offered additional exclusive content.

The newsletter is different from the reference as the copy is sent to the subscriber rather than being only on the website. Another factor is that reference sites are continuously being updated whereas newsletters are updated once in a specific period.

5. Community Subscription-Based

A community subscription-based model is one where subscribers pay for the ability to be part of a network or community of similarly minded people, e.g. personal relationships, hobbies or business networking. Social media is a basic example of this, although many of them are free.

Users on these sites can often upload and share a variety of content and communicate with each other in a number of ways.

6. Portal Subscription

A portal subscription is unique on this list. Portals are designed to build an audience with content from third party sources. They then collect information which can be used in SEO, email marketing, list building and lead generation.

Because of this, this style of subscription is financially free but instead costs time and information on the behalf of the consumer. The information is then used to sell the services or products of the provider to the consumer. The information can also be sold to third party sponsors for their own marketing activities.


There are a number of subscription-based models which you can take advantage of. Each one is unique and has its own benefits and drawbacks. Choosing the right one can give you a steady income and provide your business with financial security.

If you have any questions about subscription based business models, Fusebill or other items please contact us or leave your comments below.

3 Invoice Mistakes Your Customers Hate

"Image courtesy of Craftyjoe / FreeDigitalPhotos.net".

“Image courtesy of Craftyjoe / FreeDigitalPhotos.net”.

Receiving an invoice which has a mistake upon it is not just frustrating for your client, but can also damage your reputation. Often clients will assume your business is unprofessional and this can affect your prospects of supplying to those clients in the future.

Thoroughly checking your invoices is therefore a must but do you know what mistakes you should be looking out for? Here are the three biggest invoicing mistakes which your customers will hate.

1. Sending the Client the Wrong Amounts

When you likely signed a contract or agreed to the work with a client, there would have been a stipulated amount within that agreement. If you are then sending out an invoice which has a different amount to that expected on it, this will concern the consumer.

This isn’t just the case with overcharging. Undercharging can give a bad impression of your business implying that you are disorganized. There is also the chance the client will not question the amount, leaving you out of pocket for the hard work.

However, if it is a higher amount than expected, you can be sure the client will question it. This will take up some of your time, as well as theirs. A one-off incident may not be a problem, but repeatedly making this mistake will leave your clients questioning your competency.

To avoid this you could employ an individual to manually check every invoice which goes to your clients to ensure they are accurate. Or alternatively use an automatic system which can calculate the total figure accurately.

2. Not Setting a Payment Date

Clients like to know when the invoice should be paid by. Not including a due date can mean clients feel the payment is not an issue and may take their time about it. When you begin requesting settlement of a late payment, difficulties can arise if the client doesn’t know when the invoice is due to be paid by.

Ensure you don’t get into this mess by making it clear on your invoice exactly when you expect the payment to be made. It is best if you use a due date or clearly mark when you start the 7, 14, 21 days of expected payment from when the invoice is being sent or received.

This makes it clear for you and the client and allows for faster processing of payments.

To ensure there is no confusion make sure there is a space on your invoice to document when you expect the payment to be made.

It would be best to also confirm that the payment terms are the same as the client expects from the outset.

3. Clear Descriptions of the Services Provided

Your clients will want to know exactly what they are being invoiced for. This will also make it easier for your client to keep track of what has been delivered and what has been paid for.

Confusions over these matters can cost you time in unnecessary customer service as you deal with the queries your consumers are putting across to you relating to their invoices. Mistakes are also likely to delay payments from clients. To avoid this ensure you list and detail the services and products you provide to your clients on the invoices.

The solution to this problem is simple; write clear product service and product descriptions on your invoices.


By providing a clear and concise invoice to your clients you can ensure the payments due to your business are made on time. This will mean that the cash flow of your business is more consistent.

Do you need support with your invoicing? Call or email one of our experts at info@fusebill.com or 888.519.1425. Or, check out the Fusebill free trial.