Today’s retail environment is more customer-focused than ever. In this spirit, businesses of all sizes are adding flexibility and choice to nearly every facet of the buying experience. That includes offering consumers numerous ways to pay. In the months and years to come, it seems clear that the recurring billing/subscription model will continue to revolutionize the ways people purchase the products and services they want.

The subscription model, defined.

In the subscription/recurring billing model, your customers are required to pay a repeating fee at a specified interval in order to continue receiving products or services. Consumers are familiar with this configuration; after all, that is how they have been paying their gym, utility, and insurance bills for years. Once limited to a smaller cross-section of merchants, subscriptions have recently exploded in popularity due to society’s widespread adoption of the internet.

Types of subscriptions include the following.

• Physical. Goods like beauty products, food, or beverages are delivered on a regular basis. The customer can modify or cancel at any time.
• Software as a Service (SaaS). Instead of paying a one-time fee to buy the license for a security or office-related program, companies now allow customers to submit recurring payments. In return, the program is updated automatically throughout the subscription.
• Subscription-hardware combination. Increasingly popular in recent years, this model allows users to purchase physical goods such as exercise equipment and then couple it with a monthly package that provides workouts, instructional videos, and so forth.

As this secure, card-on-file payments model continues to win converts, more and more customers (and the merchants who serve them), will come to realize the benefits. From our vantage point, predictions for recurring billing look quite rosy indeed. 

1. Revenues you can count on.

As a business owner, you know well the importance of knowing how much money you have at your disposal at any given time. When you’ve worked out an agreement with a customer that specifies exactly what item or service they will receive, how much they will be charged for it, and at what defined interval, both you and the buyer know exactly what to expect. There is no chasing someone to pay a bill; instead, the funds are effortlessly deducted from their credit card or bank account. By the same token, shoppers should never need to wonder if or when their products will arrive. If you conduct your subscription service effectively, there will be no guesswork for either party. As a result, you can gain a far more precise knowledge of how much cash you have, and how much will be coming into your payment gateway at any given time.

2. You will be able to cultivate deeper relationships with customers.

By definition, recurring billing services bring about long-term dealings between you and your subscribers. That provides you with multiple opportunities to communicate, ask for feedback, and offer enticements like product discounts and upgrades. Today’s shoppers are no longer content with the “one-and-done” transactions of the past. Instead, they want personalized attention, and one of the best ways to deliver it is through subscriptions.

3. The model will enable you to pivot with changing business conditions.

If there is anything that entrepreneurs have learned in recent years, it is that the commercial climate is extremely volatile. What worked last year may now be ineffectual, and new practices are arriving at a frantic rate. For this reason, you may need to make changes in your products or pricing structure with little notice. Thanks to the instant communication and accuracy that internet access provides, you can make these modifications whenever they are necessary while keeping your valued customers in the loop.

4. Simplicity will add to the attractiveness of your products.

While it is clear that people are now demanding a hyper-personalized shopping experience, it is also true that they want their buying journey to be as convenient and error-free as possible. With its predictable payment schedule and regular delivery of products and services, the subscription model allows your buyers to concentrate on enjoying what they receive from you.

5. You will continue to lose and gain customers.

The beauty of recurring billing is that it enables buyers to receive products and services at set times, paid for in amounts and time intervals that have been pre-set. In addition, consumers know that the service can be easily changed or canceled with just a few clicks. For you as a merchant, that will mean that you will lose subscribers from time to time as preferences and desires evolve while simultaneously attracting new ones. That is just a part of doing business.

6. Running a subscription service means committing to system maintenance.

Think of recurring billing as a contract between you and your customer. They agree to provide payments at the specified amounts and times, updating their account or credit card information when necessary. You, in turn, pledge to provide buyers with the goods and services you have promised. Because much of this work is probably done online, that means making your server and payment gateway maintenance and security a high priority. If your network goes down (or your protective measures are lax and lead to a data breach), your brand could suffer. Additionally, your subscribers may jump ship in favor of more reliable competitors.

Subscription services have captured consumers’ hearts because they are simple, consistent, and secure. No longer just used for gym memberships and utility billing, these convenient payment arrangements have instead become an integral part of the fabric of most business offerings. Because of the numerous advantages they offer buyers and sellers alike, these easy forms of making regular payments show no signs of disappearing anytime soon. If you haven’t yet explored how recurring billing could take your unique business to the next level, we predict that there is no better time than the present to incorporate it into your infrastructure.