This blog post is for you if you’re curious about recurring / subscription payments, and want to learn about what they are and how they could help your business grow.
What exactly are recurring payments?
Recurring payments refer to a payment model where customers are charged at regular intervals, on a predetermined schedule, for ongoing access to your product or service.
Instead of making one-time purchases, customers subscribe and are charged on a recurring basis, often monthly or annually, to continue receiving your product or service.
Recurring payments provide businesses with predictable revenue streams, build customer loyalty, and offer opportunities for upselling and cross-selling.
Here are some examples of recurring payments/subscriptions in action
Membership website – Customers pay monthly or annually in order to access exclusive content. Many fitness, wellness and coaching businesses use this model (but it’s certainly not limited to these niches).
Coaching – Many coaches offer monthly subscription-based group programs/ courses.
Directory website – An example of this is where a business pays to have a listing (business write-up) on a directory website that gets lots of traffic (visitors). The listing is then renewed every month or year.
Apps / plugins – All premium Shopify apps and many WordPress plugins use a subscription model.
Software / Design Apps – Adobe Creative Cloud, Shopify and Canva all operate on a subscription basis.
Physical products – Recurring payments work especially well for sellers that have products that run out and need to be purchased again. For example, coffee beans; pet food; vegetable/food boxes; pet food; skincare/beauty products; nutritional supplements, to name a few.
The benefits of recurring payments and subscriptions
Increased revenue: Recurring payments provide a steady stream of income for businesses, which can help to improve cash flow and financial planning.
Improved customer retention: Subscriptions can help businesses retain customers for longer periods of time. This is because customers are more likely to continue supporting a business they have an existing connection to / relationship with, especially when they’re getting a valuable or convenient service or product.
Reduced costs: Recurring payments can help businesses to reduce costs associated with customer acquisition and marketing. This is because businesses can focus on retaining existing customers rather than constantly trying to acquire new ones.
Benefits for Customers
Convenience: Recurring payments make it easy for customers to purchase products and services on a regular basis. This is because they do not have to remember to make a payment each time they want to use a product or service.
Cost savings: Subscriptions often offer customers discounts or other benefits that they would not be able to get if they purchased products or services on a one-time basis.
Peace of mind: Subscriptions can give customers peace of mind knowing that they will always have access to the products or services that they need.
Are subscriptions / recurring payments the right model for your business?
Subscriptions, whether for your product or services, can be an incredible way to achieve sustainable growth.
Here are some additional tips if you are considering offering recurring payments and subscriptions:
Make sure that your subscription model is clear and easy to understand. Customers should be able to easily understand how your subscription works, the benefits and what they are getting for their money. This includes an easy sign-up process.
Incentivise subscriptions. Offer a discount to those customers who opt for a recurring product or service. This will help you grow subscriptions.
Provide an excellent and intuitive customer experience. Customers who have a positive experience with your subscription service are more likely to renew their subscription and recommend your business to others.
Create upsells and cross-sells. Once your customer becomes more familiar with your product or service, they’ll be so much more likely to upgrade or add to their subscription.
Need more help?
I’ve helped online sellers set up recurring payments on their websites This includes a directory website using WooCommerce Subscriptions as well as a Shopify website using the Recharge recurring payments app. I’m currently building a wellness eCommerce website that also offers nutritional products on a recurring payment basis.
Book a discovery call with me here to talk through your requirements.