Boosting Subscription Success With a Merchant of Record
Digital subscription services are extremely popular right now, and the numbers prove just how many people are using them. Currently, digital customer subscriptions are valued at $14 trillion, making this industry a highly sought-after business venture for savvy entrepreneurs.
However, as you well know, the more attractive a market is, the higher the competition. With 80% of subscription vendors offering different subscription tiers to their customers, it’s best to focus on developing a bullet-proof subscription management strategy that steadily grows your recurring payments.
To do that, subscription businesses need to identify the best partner for the job, and out of the many available options, the Merchant of Record definitely stands out at the top of the list.
If you are unfamiliar with the model, make sure to read our complete Merchant of Record guide.
In this article, we will be looking at the benefits of using a robust MOR solution in perfecting the subscription business model, more specifically:
4 Subscription Management Best Practices
Why the MOR is the right choice
4 Subscription Management Best Practices
Are you seeking powerful subscription management strategies? The reality is that the effectiveness of your product or service hinges largely on the subscription management platform you employ.
Therefore, here are five key guidelines to consider when looking for ways to boost recurring payments, as well as when evaluating a subscription management solution for your business.
Ensure streamlined onboarding and self-service
One of the key ingredients of subscription business models is when the ROI is immediately apparent.
The faster your subscribers understand the value your service brings, the higher your customer retention rate will be. To do that, you need to simplify your onboarding process and present your key features as soon as possible.
Also, since you will need to keep a close eye on your customer churn rate, you need to consider friction, or better said, the lack of it. Implement user-friendly sign-up procedures like the self service portal so customers can easily manage their accounts and make changes with as little resistance as possible.
Apply clear and transparent pricing
Setting subscription pricing can become a complicated endeavor. Why? Because, at times, business owners strive too hard to cater to too many different customer preferences.
Given the intricacies of pricing structures, subscription billing complexity might lead to customer attrition. Therefore, it’s necessary to maintain simplicity and clarity in your subscription offerings. Provide transparent explanations for each tier’s features, renewal terms and remove any concealed charges.
Ensure your subscription pricing is straightforward and easily comprehensible for all customer segments.
Offer flexible subscription options
You need to gain the approval of your customers, and one of the ways to do that is to cater to their payment preferences. As we’ve mentioned before, you don’t need to go on a wild goose chase, but keeping your subscription billing options flexible will definitely help when managing subscriptions.
That being said, here are a few things you might want to consider doing.
Try different pricing models and structures to determine which fits your target audience best. Also, you might want to provide your customers with multiple payment methods and currencies to gain their loyalty.
And let’s not forget about subscription models. Make sure your subscription management system provides several models, ranging from automatic manual to hybrid subscriptions.
Subscription flexibility is an asset you cannot overlook because it gives you the means to constantly perfect your offering, thereby generating greater annual and monthly recurring revenue.
Consider automated billing and dunning management
Many subscription business owners believe that success hinges solely on acquiring and retaining subscribers. However, running a thriving company also means blending innovative growth strategies with effective revenue recovery approaches.
So, consider automating your recurring billing process, as this will help you effectively manage all charges.
Additionally, give some thought to how you are going to recover lost payments. The simplest way is employing dunning management. By using automated retry mechanisms and transparent customer communication regarding failed charges, you can successfully recapture lost revenue.
