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How recurring billing can jumpstart revenue
With many in the online space focused on ecommerce and mobile shopping, these one-time purchasers are leaving a lot on the table. At least according to one expert. He says recurring billing - subscription sales - are the way to reach revenue gold in the online space.
Kristina: How does Fusebill work?
Steve Adams, Fusebill CEO: Fusebill automates billing and collections for subscription-based companies. Unlike traditional systems that are inherently designed for one-time purchases, Fusebill is optimized specifically for recurring billing because it manages the full customer-lifecycle from beginning to end. As part of the recurring subscription platform, Fusebill also automates communications to customers, which may include notices about expiring credit cards, alerts about failed payments, and reminders about overdue payments.
Kristina: For consumers, what is the draw to recurring charges/subscriptions?
Steve: Consumers prefer subscription based charges for three reasons:
1) They avoid larger, one time purchases. Software that once cost $499 might be available at just $10 per month. It's similar to leasing a car.
2) If the subscription to a product or service is no longer needed, the relationship, and the fees, can usually be easily terminated.
3) Recurring charges are predicable. The costs and delivery are pre-determined. It also eliminates emergency trips to the store to restock.
Kristina: What are your top 3 tips for businesses creating a recurring services platform?
Steve: 1) Customer Experience matters - Because consumers can typically cancel a service with little notice, businesses really need to deliver an excellent customer experience. Subscription billing eliminates obstacles to purchase, improves support, and most importantly - delivers on your promises.
2) Billing is critical - The monthly bill or credit card charge a key interaction with the customer. Charges need to be correct, and on-time; customer service teams need tools to quickly resolve any issues; and customers need access to their own account information.
3) Focus on subscription metrics - Customer lifetime value, churn, monthly recurring revenues - these are the core metrics that matter. Make sure your system can calculate these key metrics - and that you're paying attention to them.
Kristina: What issues do brands need to be aware of before creating a recurring fee service?
Steve: Recurring billing is hard and often underestimated - Brands often start with a very simplistic view of pricing but rapidly have a proliferation of pricing plans, payment terms and billing methods. Cash flows are delayed - because subscriptions eliminate the big 'one time' purchase price, brands are collecting smaller amounts over time. This means that it takes more time to build a self-sustaining business - and collecting on time is essential. Execution and automation are fundamental needs - When looking for a service, make sure your recurring subscription provider has the knowledge and expertise to execute efficiently. Due diligence should include the following check list: end-users receive an excellent customer experience; repetitive tasks - such as billing, charging, collecting and communicating - are automated; and operational costs are positively impacted.
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