Membership Credits Management Made Easy

Introducing credit-based programs into memberships has taken member engagement to the next level. Credits are digital tokens that allow members to access the services of their choice. They have redefined service usage, and have become the backbone of successful loyalty programs.

Memberships offering digital services such as online lectures, fitness coaching sessions, gated content access, and more, can implement credit-based models. These models not only allow members to access services, but to access them at their own pace and price.

Now arrives the question of how to manage these credits…using subscription management software is the best solution. In this article, let’s explore how this software streamlines credits management, and strengthens member loyalty.

What are Membership Credits?

Think of credits as digital currency that allows customers to purchase online goods. Today, when online memberships are thriving, this digital currency is being adopted increasingly. When users sign up for a membership, they are allocated a bunch of credits. These credits act like tickets for unlocking services.

So essentially, customers pay not for the entirety of a membership’s services in advance, but only for a specific number of credits. The price of these credits corresponds to the value that they unlock. Let’s take an example:

A digital book club gives 10 credits to its members each month. They can download one book per credit. This gives them the freedom to download the books of their choice, and pay for them only. No paying for content they don’t need.

Credit-based models are common in memberships with their own apps or online platforms. Such as language learning and wellness apps. Credits are also widely used in loyalty programs. Some memberships rely on conventional subscription plans for their core services, and employ credits for their loyalty programs only. It depends on each business’s revenue and customer retention strategy.

Why Businesses Offer Credit-Based Memberships?

These are the benefits a business gains by offering membership powered by credits:

Higher Retention Chances

The credit-based system has more customer retention potential, as it doesn’t lock members into fixed service plans. Customers can easily consume different services each month. Conventional subscription plans restrict this freedom, as they offer a specific set of services, and demand payment for those only.

To change service or feature lineup, customers typically have to switch plans too. But they don’t have to do any of that with credits. They get to have more control over how they use services, giving them a good reason to stay.

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Predictable Costs and Revenue

Simple usage based models can incur unexpected costs for a business. Members may consume a lot of services at times, creating a huge liability on the business’s balance sheet. It has to absorb the costs of operating the service before it sees any return.

This makes revenue unpredictable as well, since the membership has no way of knowing how much its members will use. The credit-based model prevents this surprise element, and makes operations more balanced.

By selling a specific quantity of credits upfront, the business can know exactly how much it’s earning. It can also cover operational costs with advance payments. The billing is still usage-based, but smarter.

Implementation of Tiered Plans

Different credit balances can be provided in accordance with different tiers. There can be, for instance, three tiers offering 10, 30, and 50 credits respectively. The higher a member’s tier, the higher their membership level, and the greater the perks they can be entitled to. Selling credits like tiered subscriptions is attractive, and promotes upselling.

Credits Management Can Get Challenging Without the Right Tools

Managing credits isn’t easy if done manually. There are a number of challenges a membership must deal with to give its customers maximum service value.

Determining credit rollover and expiry

Should remaining credits roll over or expire? A customer might not utilize all of their credits in a month. It is important to determine the fate of their unused credits. If they are allowed to roll over, this might promote credit hoarding, and discourage timely membership renewal.

And if all credits are expired as soon as their cycle ends, members might find this too strict and wasteful. The business must look for options to strike a balance between these two opposite scenarios. One potential solution is offering grace periods, and they can easily be implemented with a good subscription management software.

Tracking usage

Tracking online usage and without a metering software? Impossible. Customers’ credits cannot be tracked manually. In fact, in order to set up the whole credit-based system, businesses need assistance from external software. They have to invest in one that automates their key management tasks, and simplifies member billing.

Managing plan changes

Imagine a customer wants to downgrade their membership level. For example, they want to move from the 50 credit plan to the 20 credit one, and they want to do that mid-cycle too. Suppose they have 25 unused credits from their current plan. How should the business proceed now?

It can either roll over these 25 credits to the next cycle, and the customer can use them at their own pace. It can also convert these credits into their equivalent amount, and issue it as refund. But manually handling any of these options can slow down the customer’s transition to the other plan.

Matching bills with usage

This is perhaps the most critical aspect. Customers must be accurately billed for the number of credits they are entitled to. If a customer receives 10 credits as part of their plan, but tops up 10 extra for additional usage, the business must keep a record of it. Missing such updates can lead to inaccurate bills that either harm customer relationships or cut into profits.

Membership Credits Management Made Easier Than Ever with SubscriptionFlow

Implementing, applying, tracking, and managing credits need not be complicated. SubscriptionFlow’s subscription management tools let you handle credit-based memberships like a breeze.

Here’s what you can do:

Issue Credits Automatically

SubscriptionFlow runs billing and renewals on autopilot. When a member’s subscription is renewed, their credit balance renews too. No administrative interference required.

Track Usage in Real-Time

The business gets a holistic view of all of its customers’ profiles on an intuitive dashboard. Through this dashboard, it can track their credits too. When a customer utilizes some credits to access a service, the business can instantly see their updated credit count.

Set Rollover and Expiration Rules

Businesses can do both: allow credits to roll over, or automate expiration upon cycle end. They can set flexible rules in place too, such as rollover to the next cycle only, and expiration after that.

Enable Grace Periods

If a member fails to pay for renewal on time, they can be given a payment grace period. This period’s length can be customized as per need, such as, to 3 days or 7 days. The same grace period duration can also be applied to leftover credits from a cycle. Members may be given a 7-day period to utilize their credits, and after that they expire.

Allow Members to Keep Credit Wallets

Members should also be kept in the know regarding their credit usage. SubscriptionFlow lets them have their own member portals where they can access their credit wallet. The wallet shows them their total, consumed and remaining balance. This enables them to spend credits more strategically.

Implement Loyalty Programs

Memberships might not want to make credits a core part of their subscription system. They might want to utilize them only for engagement boosting purposes, and to give their members a gamified service experience.

In that case too, they can leverage SubscriptionFlow’s credit wallet functionality, plus a variety of other features specifically designed for loyalty programs.

Offer credit-based memberships, and thrive with boosted engagement levels and longer member lifetime durations. Use SubscriptionFlow to make credit management flawless.