From online streaming platforms to beauty products and even toys, are all recurring bills to pay. Almost all retail setups in Australia use a subscription-based payment model.
Notably, the Subscription payments model enables revenue growth while also reducing the costs incurred for customer acquisition.
The most exciting and beneficial feature of this model is how it improves customer loyalty. You can utilise your platform to upsell and push new products when you have returning customers.
Here are a few factors to watch out for before switching to Subscription payments.
Factors to Consider Before Switching to a Subscription-Based Payments Model
Striving for real value to customers should be your goal. Develop a subscription package that delivers value while priced reasonably priced. Determine the appropriate price point after researching your competitors’ offers. Check out how much consumers pay for similar products and services.
The subscription package that you develop must be based on customer preferences. Take into consideration current trends in the market for similar products and services. Try experimenting with package sizes, delivery schedules, and other aspects.
As a business, it is your job to maintain your consumers’ privacy. Ensure that you work with those payment providers whose priority is keeping personal information secure.
Advantages of Subscriptions Based Payments Model
What makes subscription-based payments work? Consumers have to fill in their payment details only once to enjoy the product or services uninterrupted. The consumer is not burdened with remembering and making payments regularly. Businesses receive steady cash inflow. The revenue they receive is reliable.
If you switch to a subscription payments model, you can enjoy plenty of advantages.
Reduce Late Payments
If customers have to make monthly payments consciously, they will miss it on occasions. Avoid this potential loss of revenue by switching to the subscriptions model. You will not have to chase payments either.
Avoid Payment Related Conversations
When a subscription payment system is set up, the payment conversation is moved out of the way. Customers like to talk about your products and services that they can enjoy. Nobody wants to be chased for payments.
Payment gateways follow PCI compliance, thus assuring that all customers’ private data will remain safe.
Enhanced Customer Experience
If your subscription model is set up correctly, it should be coupled with a brilliant user interface. Customers tend to use those systems that are very easy to use.
This implies higher customer conversion rates for you. Since people tend to share their experiences, it improves your chances of organic promotions.
Customer Retention and Limited Churn
A subscription-based system can be best described as a set-and-forget system. Once your customer registers for recurring payments, it fixes a steady source of revenue for you.
Meanwhile, the customers are free from the task of remembering payments and can freely enjoy your services.
As the benefits of this model are becoming widely apparent, many businesses are reconfiguring their platforms to support it. Australians increasingly depend on digital and electronic modes of payment.
Staying in sync with changing consumer habits is the only way to beat the competition. Since the subscription payments model fosters a long-term relationship with the customers, it can boost engagement.
Moreover, it can increase customer value while also reducing churn. So, what are you waiting for? Make the switch today!