It’s not suitable for every type of business, but for those merchants who can implement it the subscription billing model is a huge and growing opportunity.
Business analysts now estimate that this sector is growing at almost 9% a year, and is likely to hit a global turnover of some $7.5 within the next five years.
Perhaps even more strikingly, around half of all consumers are enrolled in at least one subscription plan and as many as 25% report that they anticipate using more such plans in the future.
The Benefits of Subscription Billing Software
From the customer’s point of view, the subscription model may be attractive because it allows the cost of major purchases to be spread, or because it removes the need to remember to reorder regular purchases of products or services.
Merchants likewise are enabled to attract more customers and to enjoy a predictable stream of revenue.
More importantly, though, the recurring billing model allows you as merchant to easily adapt your product or service to changing needs without requiring a complete relaunch or new purchase by the customer.
Increasing ROI with the Subscription Model
And as the model by its very nature keeps you in regular touch with your customers, it becomes far easier and less intrusive to offer them regular new versions/updates of your core product – as well as profitable upsells, cross-sells, and add-ons.
For the same reason, customer retention is enhanced. And on that point, remember what is almost the first rule of marketing – that it’s far easier and more cost-effective to sell to an existing customer than to acquire a new one.
Other revenue-enhancing options, particularly for B2B merchants, include offering installation services, Software as a Service (SaaS), and paid or premium customer support.
For the right product or service, you might also consider making available resale licenses.
How a Subscription Billing Platform Can Help
Each of these strategies can offer significant enhancements to business revenues.
But if there is a drawback to the subscription model, it’s that it can be time-consuming and expensive to administer.
That’s where the right subscription billing platform can be an invaluable aid.
The right software will allow you to automate much of the routine administration, management, and customer communications.
Invoicing, payments, accounting, and even regulatory compliance – particularly important with this model – are all taken care of. So that you are freed to devote maximum attention to the revenue generation benefits outlined above.
Talk to the Experts
All kinds of digital products and services, printed magazines, SaaS, and monthly food and drink deliveries are just a few of the businesses that are especially well-suited to a recurring billing model.
But whatever line you are in, having the right platform and software in place will be key to your profitability.
Many new packages are now becoming available, offering a wide variety of features, so for help in finding and implementing the right one for your needs, contact our expert team here.
We’re always ready to help.