When it comes to subscription payments, there are a few different plans that you can choose from. Depending on your business and what works best for your customers, you may find one plan is better suited than another. In this blog post, we’ll outline three different plans for subscriptions payments and how they can work for you and your customers.
How to Set Up Plans for Subscriptions Payments
How the Subscription Payment Model Works for Customers
After your customer selects a subscription plan, they will be redirected to a Hosted Payment Page. The page is designed to be frictionless and customizable, with a fully responsive mobile design. All the customer needs to do is enter their payment information and complete the purchase. They will be billed automatically and receive an invoice via email each time a payment is captured.
What are the Benefits of Subscription Payment Processing?
1. Recurring Payments
Recurring payments allow businesses to set up a reliable flow of revenue, rather than relying on one-time payments.
Having a set number of customers being charged on a specific day allows businesses to better predict their cash flow, and plan their budget accordingly. This helps businesses avoid any financial surprises that could throw off their entire operation.
When businesses bill their customers upfront, it eliminates the need to waste time and resources sending out late payment notifications. This type of billing system saves valuable resources that can be used for other business needs.
2. Streamlined Customer Experience
The sad truth of the matter is that many of us don’t like spending money, even when we have to. This is one of the biggest sources of frustration in the customer’s experience (UX).
If your checkout page is too long or complicated, your customers will give up. In fact, 20% of shoppers have walked away from their cart because they couldn’t figure out how to check out.
Improving the payment process is another way to improve your customer experience.
By offering a recurring or subscription payment plan, you are making it easier for your customers to make payments on time. This way, they never have to wait for an invoice or remember to pay their monthly fees.
By authorizing their payment information to be stored on your network, customers can enjoy the convenience of never having to think about billing again. This streamlined experience is sure to boost retention for a fresh payment cycle.
This convenience eliminates a major pain point for customers, making it more likely they’ll stay with you for another payment cycle.
3. Create Add-on Subscriptions
For retailers, a recurring payment isn’t just a quicker way to collect money. This payment method can also open the door to selling additional products or services.
An add-on subscription is a type of subscription service that allows a merchant to create a new product or service by combining existing products or services.
The purpose is to attract new customer segments by appealing to them with different products and services.
The eco-friendly oral care company, Bite, creates its toothpaste, mouth wash, and teeth whitening gel by dissolving the tablet in water.
You can choose to have these products delivered monthly, so you’ll never run out of them!
Bite Toothpaste offers both one-time payment options and subscription plans to give customers the flexibility they need. By offering both options, Bite Toothpaste can provide value and convenience to its customers.
New customers can try out the product on a one-off basis without having to commit to a plan. This way, they can decide if they like it before committing to a subscription. Existing customers, on the other hand, have the convenience of knowing their product will arrive at regular intervals.
In short, add-on subscriptions can help you breathe new life into existing products and services – simply by changing the way you process payments.
4. Scale Effectively by Minimizing Churn
The inability to keep customers is one of the biggest problems businesses face when trying to grow. Customers who leave can often be hard to replace, which can lead to a decrease in revenue.
If you can’t consistently generate revenue, it can be very difficult to invest in your operation to allow for growth.
The churn rate is often related to poor customer experiences. However, some reasons for customer churn are preventable. By taking measures to improve the customer experience and reduce churn, businesses can scale effectively.
25% of subscription cancellations are due to credit card declines.
If we take a look at the average credit card limit, this means that roughly 1 in 3 of your customers will need to update their card details within the next year. That’s a lot of customers your business could lose if you don’t have an effective way to scale.
A subscription billing system helps merchants keep customer information updated and retry charges automatically, which reduces the risk of losing customers or having to recapture them through email marketing or cold calls.
How to Set Up Subscription Payment Processing
Here are some tips on how to implement a subscription payment process.
Decide What Payment Methods to Support
Before you select your merchant account, you need to decide what payment options your business wants to offer customers. This is because not every payment processor will offer a full roster of options, especially when it comes to digital payment methods.
In addition, many online payment systems do not currently accept digital wallets or prepaid debit cards.
As a business, it’s important to offer payment options that are convenient for your customers’ minimum billing cycles. This way, they can choose what works best for them in the long term.
It’s a good idea to take a look at which payment options are popular among your customers to help guide your decision-making process.
Stax makes it easy to support subscription plans using a variety of payment types. This allows customers to pay using the method that’s most convenient for them, whether it’s a credit card, debit card, or ACH.
Subscription plans are a popular way for businesses to bill their customers. You can offer your customers the option to pay via credit card, PayPal, or Apple Pay.
Select Your Subscription Payment Processing Solution
Your subscription management solution should enable you to do much more than just accept payment.
As business owners, it’s crucial to have a billing solution that allows you to easily manage subscriptions, including the ability to change prices, offer discounts and trials, and segment customers.
Customer self-service tools are a great way to take pressure off your customer care team and focus on more complex issues. Allowing customers to adjust their subscription plan and manage their chosen payment method gives them the control they need to stay satisfied with your service.
The ability to integrate seamlessly with your chosen CRM, task management, or enterprise system makes it easy to onboard to your new platform and keep your existing workflows. This way, you can focus on more complex issues and leave the customer self-service tools to the customer.
Real-time metrics are a must-have for subscription services, as it allows you to track the number of new customers signing up and your rate of customer turnover.
Accurately forecasting your cash flows allows you to make better-informed decisions.
Set Up Your Subscriptions
Once you’ve selected your payment processor, you’ll need to set them up. If you’re a new company, or if you’re adding a new subscription plan to your existing offerings, you’ll have to decide on some administrative tasks such as:
- Creating a merchant account with a payment processor like Stripe, PayPal, or Braintree
- Adding a payment gateway to your website
- Enabling recurring payments
- Setting up customer profiles (if you plan to offer subscription plans to existing customers)
How Do I Create a Subscription Plan?
There are a few things you’ll need to do to create a subscription plan:
1. Choose what you’ll be offering. This could be a service, product, or even access to content.
2. Set the price for your subscription plan. This will be charged regularly (monthly, yearly, etc.)
3. Choose the duration of your subscription (how long will it last?)
4. Create an account with a payment processor like Stripe or PayPal. This will allow you to accept payments for your subscription plan.
5. Promote your subscription plan! Make sure potential customers know about it and why it’s worth signing up for.
How Do I Manage Payment Subscriptions?
There are a few ways to manage subscriptions. The first way is to contact the company that you subscribed to and ask them to cancel your subscription. The second way is to go through your bank or credit card company and have them cancel the automatic payments.
What Type of Payment is a Subscription?
A subscription is a type of payment where a customer pays in advance for goods or services. The customer pays a set amount at regular intervals, typically monthly or yearly. This type of payment allows businesses to predict and plan for their income, which can help them to grow and scale their operations.
How Do You Set Up Automatic Payments to Clients?
There are a few different ways to set up automatic payments to clients. One way is to use a service like PayPal or Stripe, which allows you to set up recurring payments. Another way is to set up automatic payments through your bank’s online bill pay service. Whichever method you choose, be sure to include clear instructions for your clients so they know how to make their payments.
There you have it! Three different plans for subscriptions payments that can work for your business. No matter what plan you choose, make sure it’s the one that works best for your customers. And if you’re ever unsure, reach out to a professional who can help guide you in the right direction.