Tag Archives: recurring billing

Using Different Pricing Strategies In Your Monthly Recurring Revenue (MRR) SaaS Business

money-767778_1280When it comes to attracting subscribers to your Monthly Recurring Revenue (MRR) SaaS business, pricing is an important consideration. There are probably numerous other organisations that are out there offering similar or substitute products to your own. While price isn’t always a factor in the purchasing decision of recurring customers, for new customers it can be high on their priority list.

The biggest advantage of owning and managing a SaaS business is that you have significant freedom on your pricing strategy, especially compared to other businesses.

Most business models are required to charge the customer as goods are ordered or delivered, this can create irregular revenue and can be hard to manage. However, it would be challenging for a grocer to charge a subscription as they wouldn’t know when customers would return to their store or how much they would need to purchase at any one time.

On the other hand, if your business has a regular demand that is more predictable, there are other pricing strategies that you could use to entice certain types of customers to your brand.

Here are those different pricing strategies and how they work.

1. Flat Fee

One of the most basic fees is for your business to charge one fee for access to your software. This is one of the most common pricing strategies for your business and therefore the easiest for your accounting team to calculate the revenue expected each month. An example of this would be StockUnlimited who charge a flat fee of $9.99 for unlimited downloads of their images.

This however doesn’t offer much flexibility to the customers. What if the customer only wanted a couple of images a month? There might be more cost effective options available elsewhere.

So this model is only really suitable when the customer knows they are going to be using the entire package on offer or you can only offer a single level of service.

2. Tiered Pricing

Another popular pricing model is to introduce a tiered pricing model. This is where you have at least two different price points which offer the customer something different. Netflix has the perfect example of this. Their lower level allows only one person to use the account at a time, while their second and third tier levels allow two and three people respectively to watch programmes on different devices.

There is a limited difference in the amount charged per level, but it does give the client choice on their level of use and their control.

Another example would be MailChimp. Their pricing structure is based on the number of subscribers on your list and the number of emails you send out in a month.

3. Long Term Discounts

If your services are expected to be used over the longer period, then you can sign up individuals on quarterly, six monthly or annual contracts where they will receive a discount for committing to longer term contracts. For instance, if they subscribe to a monthly plan they will pay $12 per month, but if they sign up to an annual plan they can pay just $120, saving $24.

This only works if the subscription is taken upfront as there might be those who take up the cheaper options and then cancel their subscription before paying the full amount.

A good example of this would be ShutterStock where a monthly plan costs $249 per month and a yearly plan costs $199 per month.

4. Bolt Packages

Another, less common, model is the bolt on model. This is where the client pays you a regular ‘retainer’ or consultation fee and then can add on modules to their preference. This is a great model because it gives the customer complete freedom in their purchasing decisions and they can tailor the price so it matches their ability to pay.

An example of this would be UK company TwoFeetMarketing. They charge a low consultation fee as a membership and then additional monthly subscriptions for services like social media management.


There are many different pricing strategies that you can use in your pricing strategy to attract new customers and keep others happy. Many of these will help grow your business’ profits and make your revenue more predicatable.

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 Alert Clients About Price Increases When You Use Auto-Renew

ID-100243363The auto-renew billing model is a time saver when it comes to generating revenue from your subscription business. However, when it comes to increasing the price of your subscription service, there are several issues that can arise.

Normally customers are resistant to changes in price, especially when the price increase is high and they don’t see value for money. Alternatively, the perceived value of your service could lessen and this could impact the customer churn rate of your business.

Therefore you need to alert your clients about the price increase and do so in a way that allows you to retain as many of them as possible. So here is our advice on how you can alert your clients about the price increase for your subscription services.

Step One: Identify Those Affected

You could be offering numerous different services to customers and the price increase might not impact all your customers. Some of your customers could be on special deals that have a guarantee in their contract that the price will not increase during a certain period. By identifying who is going to feel the impact of your higher prices, you can concentrate your efforts on those clients and achieve a better, more in-depth conversation.

Step Two: Analyse The Reasons Why

Your clients might not mind so much about a price increase if you can provide them with a good reason why they need to take on the costs. For instance, do you have a supplier who has increased their costs too much that it is financially unsustainable to maintain your current pricing? Or have you added on additional services that are driving up the cost to deliver your service?

If you can find out how the price increase will benefit your clients, they’ll be less resistant to the change.

Step Three: Strategically Plan When To Implement The Change

As part of your strategy you need to clearly identify when you want to implement your price increase. This should be done at least two or three payments ahead to give your customer service team a chance to contact and inform all those clients who will be affected by the change; you should never just increase the price.

Step Four: Communicate With Your Clients Via Email

Almost everyone who is a subscriber will have an email address and you should have that as part of your customer database. Send an email to your customers detailing the price increase, why it has to happen and when it will occur. This will give your clients a chance to make the necessary funds available when the price increase comes into effect or allow them to consider their options.

Step Five: Send A Letter Detailing The Price Increase

Sometimes emails don’t work, therefore, it is always best to send a letter about the price increase to your clients as well.

Step Five: Make Available A Specialist Customer Care Team

Customers care about their experiences rather than prices. If you create a specialist customer service contact team that can speak to your clients about the price increase, you might be able to increase the retention rate of your clients. If they feel they have had the best customer support, they will be happy and this may lead to more brand advocates, giving you greater marketing power even when you increase the price.

Step Six: Implement The Price Increase

On the agreed date, increase the price. Be prepared to receive calls from clients who have not read their email notifications or letters. There will always be one or two. They may be angry, but if you can advise them of when you informed them – you can often calm them down.


Increasing your subscription charge is bound to happen at some point. This could annoy your customers if you don’t have the right processes in place to reaffirm your commitment to their happiness. Therefore, follow the process above to create contented customers when you increase prices.

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 hywards at FreeDigitalPhotos.net

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.


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.

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.


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.


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.

5 Tips For Starting A Subscription Program In 2015

Are you looking to achieve a regular and consistent income from your customers? A subscription based business is one of the best ways you can accomplish this.

Running a subscription based business is easy if you set your program up correctly in the first place. So here are five of the best tips to support the start of your subscription business.

1. Start Before You Believe You Are Ready

One of the biggest barriers for businesses and entrepreneurs entering the subscription market is that they don’t believe they have enough content or functions to start. This can be very deflating and can further block you from starting your successful business.

But, you don’t need to have a fully developed product or set of content to start accepting subscription payments. You should look for a minimum viable product instead and offer your ideal customer base an introductory offer. As long as you let them know you are using them as test subjects and will want their feedback, suggestions and criticisms, you should be able to retain key customers and grow your business.

As your product develops or your content grows you can increase your fees and by this point you should have a lot of direction on what your target audience needs.

2. Engage With Your Subscribers

If you really want to succeed with your membership site then you need to grow. One of the best ways to do this is to ensure you are attracting subscribers by word of mouth. This can be achieved more easily when you are interacting with your audience and members on a regular basis.

Interaction can be done through several channels, firstly by email and then perhaps over the telephone, depending on the number of members you have. Another good option is to have conversations over social media, where you can gain more attention for your business because the conversation can be seen by their followers as well as yours.

3. Run Group Events And Challenges

Sometimes it can be hard to gain momentum for your business and while many people would just try to increase their promotional content and perhaps hope for a big break, there is another option for your business: holding a contest / competition.

Competitions are an excellent tool for growing the awareness of your business as people love free stuff. The prize doesn’t need to be expensive as long as it has value to your target audience you will gain some interest in your competition.

Also, don’t stop at just one competition, run another as soon as one has finished.

4. Give Free Subscriptions Out

As previously mentioned, word of mouth is one of the best marketing avenues you can use. There is no better way to generate positive reviews for your product and word of mouth for your brand than giving away subscriptions for free, at least for a trial period.

As like with competitions, the word ‘free’ is very attractive to consumers whether they are individuals or businesses.

5. Don’t Be Too Rigid

Being too stuck on a certain plan isn’t going to do you any good in the long term. You need to be flexible in the look and model that you use to deliver your product. The changes to your business should be user orientated and the alterations can be initiated from conversations you’ve had with your customers.

As you make changes help your customers to navigate around the new product so that they don’t feel alienated by your shift.


Your subscription business can get off to a great start if you strategise it right from the beginning. Use the tips above to help you cut costs, attract customers and grow.

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 digitalart at FreeDigitalPhotos.net

7 Common Challenges With Subscription Model Businesses

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.


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.

Image courtesy of renjith krishnan at FreeDigitalPhotos.net