There is a subscription for everything in today’s economy. From streaming services to soda to meat direct to your door to clothing, you can sign up for anything you like. Even cars are now coming with subscriptions for services and features. It makes sense for your business to hop on the rising tide as well and consider subscription services. It can be complicated, however. In what frequency are you offering your services? Along that vein, are you offering a physical product or a service - that will drastically change your management. What about price points? How do you handle cancellations, refunds and other bits you’d rather not deal with?
Here, we’ll take a close look at subscription and billing management and give you all the information you need to select the right path for your business.
What are subscription services and how do they work?
I think we’re likely all aware of what subscription services are but you may not necessarily be completely aware of how they relate to your business. At the ground level, you’re selling widgets and you want to offer a subscription service for your customer to get one widget a month for a single price that bills automatically. Simple principle, especially for the consumer.
The back end, however, can be complicated. First, you need to have a system to rebill your customers each month, including all the particulars about shipping and handling. You have to be able to manage cancellations too - how long do your customers get to cancel their subscription and still get a refund for that month?
What about bill management? They’re the same right?
No! Bill management software and subscription software can be two very different systems. Bill management itself is the process of managing all of the various subscription and purchase tiers that you have available. All those questions we asked in the last section? The answer to all of that is proper bill management. If you don’t have a firm understanding of bill management and have a software system that works for you and - most importantly - that you understand, you can’t really offer an effective subscription service.
So what do I do?
First things first - get your billing management under control. There are several ways that you can do this, including partnering with your current eCommerce provider or working with a third-party company to help. In essence, you’re looking for a company that will help you track your invoices, bills, outstanding credit and so forth. A few things to consider when you’re looking for a solution.
If you’re a smaller business or want to simplify, you can look for a billing management system that offers the four types of billing: Recurring, one-time-invoice and prepaid. Conversely, an all-in-one solution may cost more on a volume basis or may not be right for a larger business that likes to have lots of custom options.
You want to ensure that the platform you use for billing management is clear and transparent so you can be clear and transparent with your customers, especially as it relates to subscriptions. Just do a quick Google search and you’ll find thousands of dissatisfied customers that note that “the terms weren’t clear” or “I didn’t understand.”
Most billing management providers will give you a statement detailing the transactions they processed with the fees associated. If you don’t understand how these fees work, get on the phone and speak to the company until you absolutely do.
If you’ve got questions, the last thing you want is to wait on hold. Hold music is nice, but you don’t need to hear it. Make sure you’re considering a bill management platform that supports your style of business.
Billing management - Check! Now what.
Now we can look at subscription services! Once you know how money is charged and coming back in and you’ve got a good handle on it, it's time to get subscriptions going to jack that number up! Subscription services are increasingly a crucial role of a business plan. We’ve stepped through a few of them in detail on our blog previously and you should definitely take a look if you’re shopping around. When you’re selecting a company to partner with, remember to keep your customers in mind. What do they need? What exactly are they subscribing to? Subscriptions can help your business and your customers but they can also be a detriment.
Subscriptions seem great!
In many ways they are! Subscriptions can help you create income on a more consistent basis, helping you grow your business. When you’re getting ready to offer subscriptions, keep in mind that there are many different models. Recurring payments are the simplest, where you’ll charge your consumer a set amount at a set time, each month/week/quarter etc. There are also tiered subscription models that allow customers to choose the types of products or services they want. These can be more complicated to set up but can yield great results if you have different products to offer.
With many systems, you can also offer the always popular free trial. The system will automatically charge a reduced rate and charge the full rate at the end of the trial. There are lots of different things you can do with subscriptions that are beneficial for your business.
There are, however, a few cons that you might need to keep in mind when you’re considering offering subscriptions.
Subscription and billing management are two items that, when they work, can increase your revenue and help make your customers happy with the service they’re receiving from you. If you don’t want to deal with any of this - and we totally understand if you don’t - Swipesum can help you find the solution that works best for you and your customers.