Tag Archives: recurring billing

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.

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.

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.

Conclusion

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.

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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.

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.

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Getting Your Customers To Understand The Convenience Of Subscriptions

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.

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How Often Should You Update Your Subscription Pricing?

There are often times that you will need to update your subscription service prices. The reason for these adjustments might include changes in costs or attempting to reduce / increase demand for your services.

Most clients expect prices to increase over the longer term. This is often due to costs such as new government legislation which has forced you to implement new controls. These costs should be passed on to your customers.

However, there are times when fees can decrease. For example, you might introduce a new sales process or technology within your company that significantly reduces your customer acquisition cost.

In either of the above cases, the costs would change significantly and quickly. It would be fairly easy to know that these are good times to update your pricing strategy. Changing the prices at these times though might make new customers unhappy, especially if they have missed a saving. You might also have unhappy existing customers, who would need to be told carefully about any price change.

Slow Changes In Cost

In most cases, prices changes happen very slowly. You might struggle to know when to update your subscription prices in this case.

There are also logistical problems with changing your prices. The first problem is failing to change your fees quickly enough. Waiting too long can significantly impact your profits.

Likewise, when changing your fees, you might have significant marketing materials advertising old prices. These would need to be changed; which will be expensive.

So how often should you change the prices for your subscription business?

Weekly

This is an extreme frequency to change prices. However, this would allow your business to maintain a good profit margin and suffer limited losses.

If you were to implement a weekly change in the prices, then you would have expensive weekly changes to your physical marketing materials and likely other processes in order to implement the changes.

There could also be issues with your subscription management and customer services. Unless you change all existing customer’s fees at the same time, numerous clients on different payment plans will make it harder for your customer service team. If you did change everyone’s fees, you could anger clients very quickly and lower your retention rate.

Monthly

Monthly might be an option if your suppliers have regular fluctuations in their prices.

Changes at this level are easier to manage but customers may feel unhappy if they cannot rely on a regular monthly price for your services.

Quarterly

Many big brands do reviews based on their previous quarterly results. Changes every three months are easy to implement and limit profit loss.

However, quarterly changes might again prove to be too much for your customers who might complain about your frequent changes. If you wanted to implement quarterly changes, it might be best to consider how you are going to communicate the changes with your clients before you commit to this frequency.

Annual

Annual is often used by small to medium businesses that have a limited new customer generation and rely on the long retention of current clients. Annual is a good way to manage your price strategy and if you inform customers in advance of when you do price reviews, they will be ready for any changes.

Annual changes also allow you to better prepare your customer service team, marketing materials and other requirements needed to implement the changes.

Conclusion

Changing the price for your subscription service is not a decision to be taken lightly. How often you make those changes can have a significant impact on your business and its clients. Ensure you are doing it right by considering the costs of changing your subscription fees.

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.

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