You Need A Recurring Revenue Stream to Draw Success in 2021 And Onwards

Nowadays, people don’t want to clutter their houses with things that have a one-time utility. Such a minimalist approach triggered the need for a hard form of a newspaper to be replaced by the e-papers, movie, and music CDs with cloud-based services.

With time, customer behaviour changed, and this change urged different businesses to consider a subscription or recurring billing for the future. Today, many analysts predict a hopeful future for those companies that align their business growth through recurring revenue streams. Following are the reasons that attract different businesses towards recurring billing:

• Predictable revenue
• Business stability
• Maximum utilization of resources
• Better customer experienced
• Option to cancel the subscription
• Diverse prices for different types of subscriptions

There are a lot more reasons to opt for recurring billing, however, the shift from a one-time payment method to recurring billing is not easy. You must have a holistic plan to shift your business to subscription billing.  In 2021, you must consider the following factors before adopting the recurring billing model.

Not All Business Are Made for Subscriptions

Recurring billing is one of the leading business models but you cannot negate the fact that every business type is not suitable for subscriptions. When you are considering subscription billing for your business:

• Analyse the nature of your business
• Research about subscriptions models in detail
• See where would you stand after 5 years with your subscription billing model
• It is better to run a pilot test before you adopt recurring billing

If you act the way mentioned above, it will be easier for you to decide whether you need subscriptions or not. For example, one cannot think of subscriptions for pest extermination services and shaving equipment but some companies offer subscriptions for such products and services and have pretty smooth recurring revenue streams. So, you need to analyse the market and plan things to come up with a subscription billing strategy that not only works today but boosts your business in the future as well.

Also Read: Fitness Industry is Proliferating with Automated Recurring Payments-This Is Why Gyms, Yoga, and Training Centers Should Capitalize On Subscription-Based Services

It Takes Time & Investment to Set Up Recurring Billing Model

If you believe that recurring billing adoption is a process that completes in a few days and starts generating revenue within months, then you are living in a fantasy. Let us bring you back into the world of reality. Adopting the recurring billing model not only takes time but can be tiring as well. Why adopting recurring billing can become a bottleneck for businesses?

It is because every business has its own requirements and one has to follow a custom approach to adopt subscription billing. No matter how well you plan, some challenges would come up once you start using subscription billing. Many businesses claim that their workload and complexities in business operations have increased with the adoption of the subscription billing model. So, you need patience and robust planning if you want to go for recurring billing.

Also Read: Leverage Subscription Management Software-Expand MRR for Your SaaS Business Growth in 2021

Better Customer Experience Should Be Ensured

Do you know what is the backbone of the recurring business model? It is the customer experience. You need subscribers for the success of your recurring business model. Subscribers need to be lured and customer experience is the foremost thing to lure your potential customers. Whenever you plan to adopt recurring billing, devise strategies to entertain your customers in the best possible way.

You can get feedback from your customers and improve your products and services. It is better to track the customer journey and analyse the customer data to come up with effective plans for subscriptions and subscription marketing. Customers hailed subscriptions because they could avoid sticking to the products that they used to buy through single-payment methods. Now they can simply cancel the subscription if they are unsatisfied with the services. Improve the customer experience every day and reduce churn.

Also Read: Want to have Happy Customers? If So, Get Subscription Software for Your Marketing Agency

Dunning Should Be Part of the Plan

You cannot run a subscription or recurring billing model without considering dunning. Most of the subscription fees are paid through credit cards and the problem is:

• Credit cards can be lost
• They can expire
• They can get cancelled
• Credit cards have spend-limits

So, you cannot expect that money enters smoothing into your recurring revenue stream. You must communicate with your subscribers via emails, messages, and calls to deliver messages and notifications regarding the subscription fee that they need to pay. You can also offer premium subscriptions to your loyal subscriptions. When you run a subscription billing model, it is your responsibility to track the causes of declined payments. However, you can opt for dunning management services offered by various companies.

From Freemium to Free-Trial of Premium, Offer Right GTM Strategy

Many companies are entering the market and competition is increasing at a rapid speed. SaaS Companies with recurring billing model offer fermium or free versions to attract customers.

Selecting any of the GTM strategy depends on the nature of your product, market size, and customer demand.

Learn more about which option works best for you in our latest read here:

SaaS Free Trial vs. SaaS Freemium—An Ultimate Exploration of the Option That Drives More Paying Customers and How!

Freemium Free Trails, both work. It is just recurring billing is different from conventional billing types and when businesses offer a freemium or free trial without a workable plan, they have to bear the loss. Though the customer is important, you need to wisely plan free GTM strategies to establish a stable and consistent recurring revenue stream.

Also Read: Subscription Management and CFOs – Facts and Impacts

Customers Might Not Have An Instant Interest in Your Services

Even if you have made a flawless recurring billing plan and succeed in opting for this business model, you cannot expect customers to instantly get on board. Sometimes, Freemiums or free trials, the best customer care, and timely customer support fail to get customers as much as you expect. You plan things with the perspective of earning more revenue but customers have to think about whether they need a subscription for your services or not.

When you adopt the recurring billing model, coordinate with your marketing team. Your marketing campaign will help in conveying the idea that how valuable your services are and why do people need them.

Also Read: Subscription-Based Business Model Explained-Proliferate Revenue Opportunities with Recurring Billing

The one-time payment methods are indeed becoming obsolete in 2021 and onwards but when you adopt recurring billing, there are many new challenges that you have to face. However, you can minimize these challenges with robust subscription management software like SubscriptionFlow. Not only the software but there is a team of professionals at the platform of SubscriptionFlow to help you with your recurring billing model.