As a savvy business owner interested in providing your customers with high-quality products and maximum service and payment flexibility, you can’t lose when you make the move to start offering merchandise and services on a subscription basis. Even so, it is important to recognize that this process does not come without obstacles to overcome. In fact, the challenges really begin after you set up recurring billing options for your customers.

What is recurring billing?

In recent years, the subscription model has really taken off. Using what is known as the software as a service (SaaS) model, virtually all modern digital providers offer web-based applications remotely as opposed to on-premise using local machines. Instead of providing a one-time payment, subscribers now are billed monthly or annually in order to maintain uninterrupted access to the programs and services.

The same scheme is now being used in countless other ways. Consumers can use the subscription model to do the following.

• Fund ongoing memberships to businesses such as clubs and fitness centers.
• Set up recurring billing for services such as child-care or to distribute the cost of big-ticket purchases over several months or even years.
• Schedule favorites or frequently used items such as groceries to be sent right to their door on a predetermined time schedule.

This model provides convenience and predictability for merchants and customers alike and can easily be integrated into almost any product offering. But just how do you go about finding the best options for subscription billing? And what steps can you take to keep the system rolling along smoothly?

Picking the best billing provider.

Your customers are enjoying the prospect of getting their products regularly, and they love the fact that they won’t need to remember to make a monthly payment. By the same token, you are looking forward to the predictable influx of cash that subscriptions provide. To make both of these happen, you must find the subscription billing software that will most effectively meet your needs. As you review your options, ask the following questions.

• How long will it take to implement the software? The system should be easy to configure, and training your staff in its use should not be overly complex.
• Does the billing software integrate well with your existing technology? For instance, it should automate the creation of accounts immediately after a sale has been completed. In terms of accounting, data should be properly formatted when it arrives into your accounting system. Record-keeping, including coupons, plan types, and account pauses should be seamless.
• Does it accommodate various payment methods?
• Does the vendor provide a way for you to easily set up a subscriber-facing payment page? Better yet, do they offer a hosting payment page that you can configure in just a few steps?
• Does the provider give you various subscription billing models that can fit you and your customers’ evolving needs? Common types include fixed recurring (products have a single price and are charged on a regular basis), quantity-based (prices changed based on how much is purchased) and usage-based (buyers pay only for what they use).
• Does the software allow you to furnish incentives to promote your products, including gift cards, free trials and coupons? Is there a mechanism to track the success of your initiative?
• Is there a way for customers to easily pause or postpone their subscription? This is far better than terminating and restarting the service.
• Does the software reduce involuntary churn by integrating with the major credit card companies to modify expiration details when they change? Will it alert you of impending expiration dates or account closures? Will it automatically retry failed transactions using a “smart” dynamic retry algorithm? Finally, does it contain built-in dunning support so that you can personally reach out to customers individually when transactions cannot be updated via automated means?

Finally, it is important to choose a vendor with direct experience in your particular industry. After all, each sector has its own specific challenges.

Recurring billing best practices.

Once you have chosen a vendor, configured your systems, trained your staff, and begun to get customers on board, there is no better time to build a foundation of practices and protocols that will help to ensure seamless operations going forward. The following suggestions are an excellent starting point.

• Make data security your highest priority. It is imperative that you invest in robust security measures that will enable you to protect your customers’ payment details and other data from cyber threats. Carefully scrutinize every third-party entity with whom you partner to make sure they are in compliance with industry security standards and have strong measures in place.
• Make every facet of the subscription process transparent. There should be no ambiguity whatsoever when it comes to your cancellation terms, refunds, payment schedule and policies. Customers should be able to contact you in several ways (email, via phone or chat, and even by mail). It is also helpful to develop an online knowledge base and user forum that clients can consult 24/7.
• Maintain open, frequent communication, especially whenever there are any changes in products or pricing, however seemingly insignificant they may be.
• Keep an eye on your subscriber churn metrics. If you notice any sudden drops or irregularities in the usual pattern, it’s time to look deeper into your products or sales strategies.
• Furnish choice to customers when it comes to payment frequency. Letting buyers choose the day when their funds will be withdrawn increases the likelihood that money will be available and raises their satisfaction level as well.
• Invest in subscription management software that streamlines with your recurring payments system. It will allow you to keep track of all your payment information easily because everything is organized in one place. Additionally, you can monitor issues such as duplicated subscriptions and cost-creep and can view the productivity levels of each of your sales staff members.

The recurring billing model has represented a sea change for countless businesses of all sizes over the past few years. Once you have chosen and configured your systems, trained your staff and promoted your new model to your customers, you have everything in place. With ongoing maintenance and regular attention to the details, your subscription plans should provide predictability, cash flow, choice, and maximum profits for years to come.