In today’s competitive commercial climate, maintaining a thriving business is no easy task. You must do your best to rein in costs, provide stellar products and services, and offer maximum personalization and flexibility to your customers. Given that convenience and merchandise versatility are absolute essentials, one of your best resources is to incorporate subscriptions and recurring billing into your business model.

Before you set up your recurring billing system, however, you probably want to understand why doing so would be such an excellent boon for your business. The following four things you should know about subscriptions will go a long way toward convincing you.

1. Recurring billing is more attractive to customers.

Imagine that you are a consumer who wants to buy a high-ticket item such as a piece of sound equipment. The only sticking point is that the one you want costs $4,000. The prospect of slapping a cost like that onto your credit card probably makes your eyes glaze over.

But what if you could obtain that same shiny new toy, except that instead of paying a lump sum of $4,000 now you are allowed to spread the charge over the next 20 months? Suddenly, the original bill looks a lot more manageable because you will only be expected to have $40 automatically withdrawn from your bank account once every 30 days. People would be much more likely to make the purchase if they were only expected to shell out the equivalent of 10 cups of coffee for the privilege.

With every consumer that you successfully recruit as a customer, your business gains potential. Just one happy buyer can return to purchase additional products numerous times. Additionally, they can become a highly-effective, free ambassador and influencer whose positive opinions about your store will be a catalyst that convinces other people to see what you’re all about.

2. Revenue is predictable.

This ties directly into the second advantage of recurring billing; a steady and stable source of profits. Businesses whose customers pay their total balance in one transaction often find that this is the only contact they ever have with the customer. By contrast, recurring billing provides regular opportunities for you to communicate with and sell additional merchandise to your buyers.

Furthermore, subscriptions allow you to more accurately predict income. When you know your financial status at any given time, you are more equipped to make intelligent inventory decisions, only ordering what you need and can afford.

3. Recurring billing enables you to pad your profits with up- and cross-selling.

One of the many reasons why subscriptions have become so popular in recent years is that customers know exactly what product they will be receiving, as well as when the shipment will arrive at their door. However, that much-loved predictability does not prevent you from building on the long-term relationship of trust that you have established with the shopper. In addition to being able to receive merchandise or services they are familiar with and can count on, recurring billing provides you with all the information you need to give your customers additional buying opportunities that are in line with their demonstrated preferences.

Let’s say you are doing quite well at providing pet-related snacks and toy boxes to dog and cat owners. They already love what they are getting, so why not enhance your offerings by also featuring training videos, beds, or health supplements? When buyers are paying less per month for their core products, they are psychologically more prepared to add on some extras.

4. Subscriptions let people try before they buy.

If you are like many entrepreneurs, you may associate recurring billing primarily with fitness and daycare centers. While these types of businesses were among the first to embrace subscriptions, numerous stores selling all manner of items and services are now jumping on the recurring billing bandwagon. In fact, some of the best options for subscription businesses are vendors who deal in digital games and software packages.

Why have these types of merchandise become so conducive to subscriptions? For one thing, sellers find it simple to implement programs allowing shoppers to try before they buy. This is often done by providing free versions that let customers take the software or game for a test run. More times than not, they will recognize the item’s compelling aspects and ultimately purchase the full version.

Seamless upgrading is another benefit that digital subscription customers quickly come to value. Instead of needing to go through the painstaking process of manually upgrading their software, they can rest assured that updates will be automatically installed as soon as they are rolled out to buyers.

These are only the advantages of subscription services that affect revenue. In addition, you will soon realize just how easy it is to set up recurring billing.

How to get started.

Incorporating recurring billing into your business model is extremely fast and seamless. That’s because the process takes place in the point of sale (POS) system that you are likely already using to transact payments, handle inventory and marketing, interact with your customers, and much more. If you have updated your POS system in the past few years, it is probably already equipped to accept payments on a subscription basis. Just call your payment services provider to begin the setup process. They will be more than happy to facilitate easy and predictable payments from your customers.

Once you have laid these foundations, your next job is to let shoppers know that you are now allowing them to pay for goods and services over time. If they don’t know that you offer this benefit, they can’t possibly sign up, and you will be depriving yourself of whatever revenue they would bring to your shop.

The final action is to set up the subscription with customers who have expressed an interest. Be sure they understand how the program works, and emphasize the importance of ongoing communication. This really comes in handy when, for instance, a bank account is closed or a credit card expires. Next, obtain the buyer’s bank account or credit card data, and agree on a monetary amount and timing structure for the withdrawals. Be sure to emphasize that you are available should any problems arise or changes need to be made.

Once your subscription plans are running smoothly and communication pathways have been set up, you can sit back and relax — at least to some extent. If you hire a company to handle chargebacks, expirations, and other difficulties that may come up, the program will virtually run itself as it facilitates the transfer of additional profits into your company. Don’t wait another day to talk to your payment services provider about incorporating recurring billing into your physical or online store!