How to set up an effective subscription business?
Published: 16 August 2022
Subscription management is essential for all companies that have chosen this business model. Subscriptions are becoming increasingly popular among consumers. They see the opportunity to enjoy a service without having to buy it. In response to this trend, companies have put subscription-based business plans in place in recent years. However, this alone is not enough to be successful, as managing customer subscriptions is central to the success of this strategy. A company must be able to manage regular payments and keep their audience interested to avoid churn. SlimPay helps merchants establish an effective business model based on subscriptions.
The success of the subscription business model
Today, ownership is no longer the trend, as consumers prefer to simply pay for the services they use. The subscription economy allows companies to more easily predict their annual revenue, and consumers to access the desired service or product quickly. However, there is always a challenge for companies who offer subscription services—it’s easy to subscribe, but it’s just as easy to unsubscribe. This is why it is important to build a strategy that focuses on customer loyalty. The subscription business model adapts to consumer usage, but requires companies to reflect how it’s set up, depending on their own needs.
Different types of subscription business models
There are two main subscription models: fixed and pay-per-use. In the first one, a consumer pays a fixed amount to use a product or a service on a regular basis. In the second one, the amount due depends on what is consumed. The more a subscriber uses a service, the higher the monthly payment will be. It is crucial to decide on subscription plans according to your product offering and your consumers’ expectations.
Subscription management: how to keep your customers?
Subscription management includes both managing monthly payments and adapting the model to your clients’ expectations. Therefore, tactics such as offering promotions and new features without increasing the subscription price can result in efficient and quality customer service. Companies must also maintain their customer relationships with active communication through emailing—a newsletter, for example. Companies can also personalise their product offering so that each customer can feel that they are unique. How do companies keep their customers through subscription? By offering them regular benefits! Discover more strategies to reduce customer churn and improve churn on our blog.
How to manage subscriptions from a payment perspective?
Subscription payment management is a key element in the success of the company’s strategy. It is essential to use subscription management software. Using a payment software allows you to avoid wasting time while ensuring a proper execution, which is essential for customer satisfaction and company growth. For fixed amount subscriptions, billing software allows you to check that each customer’s payments have been gone through. In the case of variable subscriptions, subscription management software ensures that the company charges each subscriber the right amount in each billing cycle. Even a small billing error could cause a customer to churn, which must be avoided at all costs. Using software also helps you to better analyse your customer behaviour. For example, you can see when your customers’ subscription period ends and remind them to renew their subscription.
Use SlimPay for an efficient business model
Whatever type of subscription you decide to set up as a business, SlimPay can take care of acquiring and processing your payments. We help merchants like you generate revenue by collecting the IBAN directly from the new customer’s bank, to prevent fraud. SlimPay provides you with a clear and efficient Dashboard to allow you to manage all your customers’ subscriptions in real time. In the case of failed transactions, you can easily manage payment recovery with Automatic Retry. This feature automatically contacts customers with outstanding balances and automates the payment recovery process, according to the parameters you have defined.
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