Subscription businesses are some of the post profitable ventures on the planet. The residual income creates consistent, stable income for a company. In multiple sectors, including law, real estate, technology and management, subscriptions keeps customers and businesses balances in check. In order to handle payments, financial executives implement a reliable recurring billing solution. Once selected, follow these recurring billing best practices to ensure consistent revenue and high customer retention rates.
Make Signup As Simple As Possible
To convert customers into subscribers, the recurring billing platform should simplify sign ups. From a user experience stand point, a simple billing checkout process will have higher conversion rates and sales. You can simply start with an email address and lead customers through the sign up process with credit card details at the end. High conversion rates are one of the many reasons why digital marketing is essential. With more people signing up, your recurring billing can make a positive impact on revenues.
Validate The Credit Card Upfront
In order to charge recurring bills, the credit card must be valid. When a new customer signs up, authorize a $1.00 charge to ensure that the card works. This can be a pending authorization charge that does not post to the account. In some cases, you can also post a $0.00 which typically raises less concerns for customers who are new to subscriptions. By validating customer credit cards at the start, your billing team will have much higher success rates for collecting payment monthly.
Store Credit Card Data Securely
Similar to most regular payment processing companies, your company must maintain credit card security best practices. Typically, every company must use proper encryption, SSL connections and PCI-DSS compliance. The storage of any card data such as expiration dates must be carefully secured according to industry standards. Where possible, do not store additional card security codes or customer information than required. Thus, you can minimize your customer’s risk to cyber-attacks or security breaches.
Dive Into Recurring Billing Analytics
Using a standard billing platform, your recurring subscriptions will offer analytics. These analytics should be used for reporting purposes. Most importantly, your billing team can gain insights to improve the business model. You can identify points where customers drop off, need an additional promotion or trends during the year. Consequently, recurring billing insights lead to enhanced revenue projection and customer retention opportunities.
Encourage Customers To Cancel
Obviously, you want to keep as many customers as possible with your recurring billing process. We know that it simplifies billing, eliminating the need to resubmit payment. However, it can also frustrate customers who may no longer need your service. For these customers, encourage them to cancel directly with your company. If your cancellation process is too difficult, they might just issue a chargeback instead. To avoid additional costs to your own online business, make direct cancellations very simple. Additionally, customers will be more likely to use your services again in the future.
Hopefully, you can implement some recurring billing best practices in your business. The simplified sign up converts more customers. Once on board, validate their credit cards and store the information securely. Then, gain insights from your recurring billing platform. Above all, maintain a high level of integrity. If done properly, customers will stay with your company for the long run.