Tag Archives: subscription billing

How To Sell The Convenience Of Auto-Renewal

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

When you have a subscription business you need a method to collect the membership fees from your community. You could attempt to do this by sending out a manual invoice at the start of every billing period. This can be expensive and a waste of time that can be put to better use.

Instead, you could use an auto-renewal system to collect payments automatically from your customers. There are several benefits for your business when usin

g an auto-renewal payment scheme. For example:

  • It reduces the amount of administration you and your team have to do.
  • There is a higher retention of subscribers for your business.
  • You know exactly when payments are going to be made by your customers.
  • Reports can be auto-generated to inform you when payments have failed or been cancelled.

While these benefits are a good reason for your business to use an auto-renewal subscription model, your customers will need to be sold as to why they should auto-renew their subscriptions.

The Convenience For Your Customers

The major benefit for your customers is the convenience an auto-renewal subscription model offers. It takes time for your customers to receive, check and pay a manually issued invoice. Having the process automatically completed each period allows them not to be disrupted in their daily lives.

In addition, the process can have financial benefits. As you will not have to process the payments manually you might be able to offer a discount. Energy companies commonly sign up customers to an auto-renewal system by offering a small discount, often between 5 and 10%.

These benefits are especially good if your members are paying a standard flat fee for membership. It allows them to confidently know exactly when and how much the payment will be. This can support their financial planning and management.

Calming The Concerns

One of the major concerns customers may have is cancelling their subscription. It is likely that at some point some of your customer will want to leave the business. They may feel they have to go through significant processes to cancel their subscription including speaking to your customer service team or sending emails to your cancellation team. This may worry them.

In reality the process is much easier. A customer only needs to cancel the payment instructions which exist between them and you. This can be done through their online banking dashboard. This means the payments can be stopped immediately, instead of waiting for your administration team to process the cancellation.

At the same time your online system can be informed immediately and access restricted at the next ‘end of period’. Or if you send out physical products, your distribution team can be informed of the change and they can remove them from the mailing list.

Another benefit for the auto-renewal is your customers will never miss out on a product or period because they have forgotten to make the next payment. This can be particularly useful for physical products such as magazines.

Conclusion

Auto-renewal is one of the most popular methods for subscription businesses to sign up customers. While they have significant benefits for the business, customers are sometimes unaware of the advantages they can gain from signing up to an auto-renewal system. By selling the benefits such as never missing out, the ease of payment and cancellation should they want to leave your business you can increase the uptake of auto-renewals.

This allows you to save costs in manually sending and processing invoices. This can lead you to invest the funds elsewhere in the business or offer your customers a more competitive price.

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 Turn Your One-Time Fee Business Into A Subscribe-Based Model

"Image courtesy of Stuart Miles / FreeDigitalPhotos.net"

“Image courtesy of Stuart Miles / FreeDigitalPhotos.net”

A subscription based business model has many advantages over a one-time fee model. It offers a stable income allowing you to pre-plan what resources you need on a monthly basis. A subscription based business can also offer your business a larger customer lifetime value while at the same time giving a perception of a lower cost for the product by your customers.

Subscription based businesses can afford to bring in fewer new customers per month and afford to dedicate more time to customer retention activities.

Changing your business from a one-time fee model to that of a subscription based model can seem difficult. However, Adobe has recently done this with their creative suite and while it has had some criticism, many pundits are seeing it as necessary for the company and consumer.

The main issue with this is how your business designs and implements the change. Here is our quick guide how you can switch.

1. Design Your Subscription Product

The first step you need to take is to design your product. If you run a software business this would be an easy decision. Other industries may have to be inventive but usually the subscriptions could allow customers access to resources, tools, guides, advice from your team, etc.

With your decision you should consider how much access to the product the consumer has. You might want to offer different access for different subscription levels. For example, if you have a digital art creator your lowest subscription model could offer 300 stock images to use, while a higher priced option offers 1,000.

If you want to start with one level of subscriber, remember to include some room for improvement later on. You may find customers want more features/access and would be willing to pay extra for it.

2. Choose Your Pricing Level and Billing Method

The price of your subscriptions is very important. You want to create a price point which gives you good revenue while being perceived by the consumer as a bargain. The monthly price should never be the same as a one-off fee, but instead that fee should be collected over the expected life-time of the customer.

For instance, if you sell a product now for $120 and you believe that the lifespan of the customer is 6 months you will want to charge at least $20 per month. You will also want to add a small margin, so the customers who are with your business less than you expected are still paying a significant amount towards that one-time fee valuation.

The next step is to decide how you will collect payments. The best option is to use a product, service or company which allows you to automatically collect membership fees. Many products available will automatically adjust your subscribers’ access should they upgrade, cancel or default on a payment. Ensure you check with your provider whether they offer this.

You’ll need to decide what to do with previous customers. Are you going to leave them with full access, offer them a discount or a subscription for free for a period of time? If they don’t take up your offer on the subscription will you remove access?

You could increase the uptake of the subscription with these clients by offering extra benefits in the subscription model than they currently have with the one-time fee product.

3. Communications And Testing

Create the website and all the online and offline systems to help run your subscription business. This can take minutes or days to implement depending on the software you are using. Bring in all the technical people you can to help ensure the system works flawlessly.

Then you need to create the marketing materials to announce the changes. Remember to sell the benefits of the change rather than the features. There are some generic benefits all subscription based customers can experience:

  • Lower initial and short term costs to gain access to product.
  • Better customer service and support.
  • Instant access to updates and fixes.

At the same time you want to identify a launch date and create a very specific marketing plan to create anticipation to your target audience through email, social media and other advertising channels.

4. Launch

On the launch day remove your one-time product and switch to the subscription based business. Don’t offer your clients any access to your old product to limit confusion.

Conclusion

Although it seems like a difficult proposition, changing from a one-time fee into a subscription based business is a simple and straight forward exercise. The benefits you gain from moving from one model to another can support the sustained growth of your business and offer your customers a great customer experience for a fraction of the cost per month.

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 Questions Customers Will Ask About Your Monthly Service

"Image courtesy of cooldesign / FreeDigitalPhotos.net".

“Image courtesy of cooldesign / FreeDigitalPhotos.net”.

When customers are looking at your business they will be asking themselves several questions. Some of those questions will be about how your product can support them and whether the value you have placed on your product matches their perception.

One of the more complicated areas that will be scrutinized is the security of your business. Customers always want to know that you can provide a safe environment for their payments and details. Therefore there are a number of questions which they are likely to ask you and which you will need to answer.

Here are three of those security questions and how you can provide a solid answer to convince your customers they can trust your monthly services.

1. How Are Customer Details Stored and Used?

Privacy concerns are a major issue online. Many individuals have concerns that their details will be sold to third parties for extra marketing and sales. This can sometimes lead to customers receiving dozens of spam emails, unwanted mail and phone calls which are obviously unwelcome, so consumers avoid companies who do sell on their information. Customer data can be very valuable, which is why some businesses do this.

There are certainly instances where customers will be happy for you to provide their details to other parities. However, for the majority of the time small businesses should exercise caution and not sell on customer information.

There are two ways a business can effectively deal with this. The first is to include a checkbox asking permission to share consumer’s details. This creates a psychological contract between you and the consumer.

Another method is to clearly state that you do not share any customer data with third parties.

2. How Secure Is The Website From Hackers Wanting To Steal Information?

Hacking is a real security threat online. Major corporations and small businesses are constantly being attacked by rogue internet users in an attempt to disrupt a website’s operations and steal consumer information to sell on to other companies.

A big security leak is often bad news for a company and some businesses have been severely affected by hackers attacking their networks.

There are two ways in which your business can reassure customers on this issue. The first is to employ the best technology to protect your system. Tell your potential customers exactly what system you are using and how it is the best on the market to protect your network and their information.

The second is to regularly take down your site at a preplanned time to perform regular updates. Having constant reminders on this procedure and how it will affect your customers will reassure them you are taking the right precautions to protect their data.

3. Use A Good Third Party Billing Service

Nothing is more important to your customers than the security of their financial details. Consumers sometimes want to double check when they are being asked to pay a small business with no history directly.

Using a third party billing system is one of the best ways in which you can overcome this. A third party billing company is likely to be large, well known or at least have an established reputation which can be looked up easily.

Therefore advertising that all payments are taken through a third party might be a good way for your business to reassure your customers that their financial details are safe.

Conclusion

Demonstrating to your customers that you take their security seriously is a step towards developing a relationship built on trust. This type of relationship is strong and encourages your customers to be with you over the long term. This relationship sometimes requires you to reassure your customers with words – at other times it requires investment in technology.

Whatever the method, it is important you invest to attract customers to your brand.

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.

Transparent Redirect: The Superman of Online Payment

SupermanIs PCI compliance the Kryptonite of your business?  Is payment information collection the Lex Luther to your company?  Then Great Scott! This looks like a job for SUPERMAN!

Errr… I mean TRANSPARENT REDIRECT!

Yes, we’re being a little silly, but transparent redirect or direct post really do seem like a superhero to companies that sell online, especially those who sell by subscription.

What is it?

Transparent redirect lets your business process credit cards from your website without having to pass them through your server. Which means none of your customers sensitive, cardholder data is stored on your system and you can conduct business on your website (instead of making people pick up the phone and call you, or by sending them to another website like PayPal), without having to deal with the expense, work, or burden of keeping their information secure.

How does it Work?

Basically, when a customer purchases something on your website using a credit card form, the form data, such as credit card number, expiry date, etc. is submitted to Fusebill for processing. Your customer is the redirected to your success or failure page and you receive the results using an API call.

Do customers know?

No. Your customers will have no idea they ever left your website because Fusebill transparent redirect is faster than a speeding bullet, customers never see anything but your web pages – never Fusebill.

Sounds hard, right?

Something that removes the burden of PCI compliance, keeps customers on your website, and provides an online payment method has to be difficult to implement, right?  Wrong. It’s really just a few simple like building a form for your website that includes a hidden field with a redirect URL, and a unique identifier, some API calls, and that’s it. Your developer can probably do it with one hand tied behind his or her back.

Up, up, and away!

It’s amazing that something that happens so fast and totally behind the scenes can be so beneficial to your business, but transparent redirect really is like a superhero in that way. Not only does it allow you to keep customers on your website, it drastically reduces the burden of PCI compliance because it allows you to never process or transmit sensitive data.

Want to know more about transparent redirect or the Fusebill API? Call or email one of our experts at info@fusebill.com or 888.519.1425. Or, check out Fusebill for yourself by taking our fully featured, free trial

What’s on in February?

It may be a short month, but Fusebill has a lot of great events planned for February, so sign up and mark your calendars!

cropped-registerWhy (& How) Successful CFOs are reinventing their Billing System
When: February 4, 2014, 2:00 PM EST
Cost: Free
                                            Presented by: Fusebill CEO, Steve Adams

Successful execution of a subscription strategy creates demands that challenge billing departments and CFOs. But successful CFOs turn this challenge to an opportunity and reinvent the billing systems as a key source of customer intelligence and insights. REGISTER

cropped-registerSubscription Billing 101
When : February 12th, 2014, 2:00 PM EST
Cost: Free
Presented by: Fusebill Customer Success Manager, Donna McPhee

If you’re a subscription based (SaaS or Paas) company thinking about moving your billing to the cloud, or if you’re looking for information such as what sets a billing platform apart from a payment gateway, this webinar will provide you with a solid understanding of what a subscription billing service is, the benefits it can provide, and what to look for when choosing the right service for your business. REGISTER

cropped-registerWhat is Agility in Pricing & What are the Implications for Your Billing System?
When: February 20th, 2014, 2:00 PM EST
Cost: Free
                                            Presented by: Fusebill CEO, Steve Adams

Dealing with changes in pricing is a significant challenge in any business. Pricing plans and paradigms proliferate, while individual customers require specific charges and adjustments to their accounts. The result? Vast lists of SKUs, ordering complexity, and confusion.

By examining a billing lifecycle from two perspectives, Fusebill CEO Steve Adams explains the value of agility in a subscription billing environment. REGISTER

Can’t make it on the 20th? We’re also holding the webinar on February 27th as well!

cropped-registerWhat is Agility in Pricing & What are the Implications for Your Billing System?
When: February 20th, 2014, 2:00 PM EST
Cost: Free
                                            Presented by: Fusebill CEO, Steve Adams
REGISTER

5 Reasons You Should Automate Subscription Billing – Now!

retailwireRetailers are increasingly selling by subscription, with regular deliveries of goods ranging from soaps and vitamins to socks and underwear. Online subscription selling creates demands that many back-office systems or services such as Paypal and Quickbooks simply can’t handle.

By automating your subscription billing you can increase subscription sales, reduce costs, speed up billing and collections, extend the customer lifecycle, and position your business competitively in an online world where more and more products and services are being sold by subscription.

Learn what this means for your business by attending our new live webinar 5 Reasons You Should Automate Subscription Billing – Now! We’ll expose the obstacles presented by traditional billing services and reveal how our software solution can help you quickly and easily take your subscription sales to the next level.

Join Fusebill’s CEO, Steve Adams, who will introduce you to our powerful feature set, and learn:

  • How automating recurring billing and collections can reduce your costs, speed up invoicing and payments, extend your customer lifecycles, and more
  • Why a-la-carte bundling of products into subscription plans is so critical to your growing business
  • Our detailed customer analytics and how you can instantly access dashboards and charts for tracking performance by product, channel and geography

REGISTER NOW

Time: 2:00 p.m. eastern

Date: Tuesday, January 28

Cost: Free

BONUS! Every attendee will receive a copy of our new whitepaper 7 Popular Pricing Paradigms For Subscription Based Businesses.