Recurring billing benefits businesses and customers alike
The reason so many subscription businesses have adopted recurring billing is because of the benefits for both customers and businesses. Customers enjoy the convenience and simplicity of automatic payment methods, and merchants benefit from prompt and consistent payment.
If you haven’t already, here’s why you should consider adopting recurring billing for your business.
Convenience for customers and merchants
The simplicity and convenience of recurring billing helps foster peace of mind for customers. Customers simply sign up and input their payment information once, knowing the company will be paid automatically each cycle. Instead of relying on their memory to make sure bills are paid on time, customers set it and forget it.
For merchants, predictable and reliable revenue simplifies every aspect of doing business.
A subscription billing solution allows for more accurate forecasts of how much revenue your business will bring in over a set period of time in the future, making it easier to forecast your success (or, god forbid, giving you an early failure indicator). With accurate forecasts, you can make more educated growth decisions, investing wisely in sales and marketing without fear of overspending.
Consistent and regular cashflow can also free you from the sales and marketing treadmill. You can focus more effort on retaining existing customers and providing the best possible service, rather than spending all your time pitching potential leads that may only purchase once.
Offering subscription billing lets you set lower prices in return for regular scheduled payments.
While you might be charging more over a period of time than you would for a lump sum payment, customers often prefer to pay smaller installments. This is great for getting new customers on board and better for customers looking for a discount.
Automating your billing also eliminates much of the administrative work that goes along with collecting payments and managing sales. These cost reductions can then be passed on to your customers to help lower prices even further.
Now we’ve seen how recurring billing can benefit both subscription-based businesses and customers, let’s take a look at a few of the drawbacks that come with this billing solution.