From fresh coffee bean deliveries to pet treats — there’s likely to be a subscription style available in almost any popular retail offering in Australia. The beauty of a subscription model is that it helps you build a loyal and returning customer base. With that, you get the opportunity to launch new products and up-sell to an audience that already loves your products or services. Aside from customer loyalty, what else is there? We’re going to explain why the subscription payment model is a no-brainer.
- Predictable revenue and sales
Imagine being able to anticipate the next month’s revenue with confidence. Businesses that offer subscription payments have the ability to forecast these numbers on a weekly, monthly, or quarterly basis. This is important for developing growth strategies, as well as staying on top of paying your bills and employees.
Once a customer enrols in a subscription plan, your business can rely on recurring payments for an agreed-upon time period. Subscription plans can range from monthly to annual commitments, or ongoing until the customer decides to cancel. As the frequency and payment amount are determined at the start, and typically includes terms and conditions, it adds valuable predictability to your revenue forecasting.
- Automated convenience
Subscription models are incredibly convenient for your customers too. They can select the frequency of delivery or service without having to repeatedly remember to place an order. For example, a customer that uses nutritional supplements will likely purchase the same products on a regular basis. With a subscription plan, they only have to sign up once to receive monthly deliveries of their favourite products. The customer doesn’t have to worry about running out of supplements, and your business benefits from a source of automated revenue. It’s a win-win!
- Up-selling opportunities
With a subscription model, you can communicate with customers on a regular basis — which provides great marketing opportunities and helps to build relationships and trust.
Something else to think about is the clues customers leave for you about their buying habits. You can use these insights (of your customers’ subscription preferences) to turn email campaigns into up-selling and cross-selling opportunities.
For example, a customer may select a subscription plan that limits the number of items they can purchase. When the customer approaches that limit, you can suggest upgrading to a higher-volume subscription plan. An upgrade option can be included at checkout, avoiding sales calls and allowing the customer to upgrade on their own. Cross-selling examples include options to purchase accessories or related items at checkout.
- Higher customer retention and loyalty
Subscribing customers are long-term customers. Whether it’s a weekly, monthly, or yearly subscription, a subscription commits the customer for a period of time. The customer provides valuable first party data such as product preferences, quantity, and delivery frequency. Your business can build loyalty and personalise the experience to each customer by curating products or services based on their selected preferences.
When an automated system takes care of the billing, you can devote more time to developing a relationship with the customer. Whether it’s an occasional email or a handwritten note enclosed with the delivery, your customers will appreciate the effort. This personalised service gives the customer further incentive to renew their subscription and stay with your business.
- Reduced customer acquisition costs over time
Customer acquisition involves costly and time-consuming marketing and sales work. The subscription model helps to reduce this hassle and expense. When a customer subscribes to your business’ products or services, you don’t have to repeatedly spend time and money on marketing tactics to keep generating orders from that particular customer. The longer the plan, the less frequently you will have to acquire new customers too.
Of course, every business has to attract customers in the first place, but a recurring purchase plan will help you retain those customers once they have found you.
Getting started with reliable payment processing
If the subscription model sounds like a good idea for your business, the first step is to set up recurring billing with a trusted payment provider. At eWAY, we provide a safe and reliable solution to billing and customer retention.
Your business can accept recurring payments and one-off payments through our payment processing system. Let’s say that a customer signs up for a monthly subscription but also wants to make a one-time purchase of additional services or products you provide, we can automatically process the customer’s subscription payments as well as that one-time credit card purchase.
A reliable payment partner like eWAY can simplify the subscription process for your business. Contact us today and learn how to get started.