Subscription billing is an important part of operating a membership organization. It enables your members to purchase the content they want while managing their finances easily and efficiently. Recurring billing typically takes place monthly, but some organizations allow customers to pay in advance for several months or even every year. Giving members multiple options helps them feel confident about the purchasing process and establishes trust between the customer and the company.

The convenience factor

Subscription billing is convenient for customers. Customers can sign up for a subscription and forget about it, knowing that their monthly charges will be automatically deducted from their credit card or bank account. Customers also can manage the subscription online, making it easier to add or remove items from their orders.

For business owners, subscriptions reduce customer complaints and make it easier to track performance metrics over time. Subscriptions eliminate the need to send invoices, collect payments, and process refunds on every transaction—allowing businesses more time to focus on improving operations and generating revenue growth opportunities.

The ability to change plans quickly

One of the most important aspects of a subscription billing system is how easy it is to change plans. You don’t want your customers to have to jump through hoops or wait for weeks for you to process their requests for changes in the plan. Ideally, your product will be able to easily shift from one type of payment method (such as credit card) to another (such as PayPal).

The ability for users to change plans quickly and easily will also help them feel comfortable with making additional purchases from you in the future. If they don’t think that switching from one plan to another will be confusing or difficult, they’re more likely to keep buying from you over time and may even recommend your products/services to others who are looking into joining up.

Grow your revenue

If you’re already a profitable business owner, subscription billing can help you increase your revenue by offering additional products and services. For example, if you have an e-commerce store that sells t-shirts and hats, then adding a monthly subscription box of surprise gifts would be a great way to expand your customer base. Or consider this scenario: if your company sells custom clothing made to order for individuals or teams—like sportswear—you could offer customers the opportunity to sign up for subscriptions on top of their custom orders. This way, your company would essentially be creating highly personalized “subscription boxes” for each customer order instead of individual purchases from scratch every time someone needs something new in their wardrobe.

Reduce churn

Churn is the percentage of customers who stop using a product within a certain period. For example, if you have 10,000 users and 5,000 of them stop using your product within one year, then your monthly churn rate is 50%.

It’s important to reduce your churn rate because it directly impacts your top-line growth. A high monthly churn rate means that you are losing revenue each month due to customers leaving the platform or canceling their subscriptions.

A key indicator of whether or not a customer will renew their subscription is whether they were satisfied with the product in its current state when they canceled it or not. If you can improve their user experience with new features and functionality over time (a process called upselling), then there’s a good chance that those same users will return once they realize how much better things have become since they last used it.

Insights into usage and preferences

You should also make sure to understand how your customers are using your service. Subscriptions have an increased focus on the user experience, so it’s important to know what your subscribers think of the product and how they’re interacting with it. You can do this through:

• Surveys
• Analytics and usage data (e.g., number of clicks)
• User engagement metrics (e.g., time spent using features or products)

Conclusion

With so many benefits, it’s no wonder that subscription billing is on the rise for both consumers and companies. This new method of payment offers customers convenience and flexibility while providing businesses with a steady stream of revenue. Subscription billing also helps to reduce churn and keeps subscribers engaged by allowing them to customize their plans or upgrade as needed. Ultimately, subscription billing allows businesses to provide relevant content and offers that are targeted to the specific needs of their subscriber thanks to insights gained from usage data.