The most successful businesses known to man today are those that adopt dynamic business strategies and tools to help them stay ahead of the competition. These businesses remain successful because they are able to constantly adapt to the ever-changing needs of their customers. One area where changes are constantly implemented is in the area of pricing policy, and in this area, the use of a recurring billing model is quite pervasive.
Recurring billing software is not new since they have been around for quite some time, however, what we notice in this day and age is that many more businesses like Microsoft, Netflix, and others are using them more because of how flexible and adaptable they are.
Regardless of the industry you operate in, if your business offers a utility of value with multiple service variants, you need to adopt a more dynamic pricing policy. This, however, is not an easy thing to do because making a transition from a traditional model to a recurring billing model is fraught with challenges despite the visible benefits on offer.
Understanding what these challenges are will place your business in good stead to implement a successful recurring automated billing strategy that will pay you further down the road.
Some common challenges businesses face when implementing a Recurring Billing Model
Poor Customer Service implementation
Providing your customers with a quality service should be your number priority, but what should be number two? Quality customer service. No matter how good your service may be, if your customers find it hard to access it or are not able to receive solutions to their complaints on time, their loyalty will wane over time. Nothing beats a quality customer service, and this is something your business should strive for. In as much as you want to implement a cost-effective pricing model that offers your business the greatest benefits at the least cost, you also need to improve your level of responsiveness to customer requests and inquiries.
Adopting a recurring billing platform is not enough. If you must do so, make sure the platform allows customers multiple order retries with their credit or debit card. Also, make sure that your communication lines are open and responsive to their needs.
Limited opportunity for growth
Many business managers only think of the present and less of the future. When adopting a billing strategy, they only think of how such a strategy serves their purpose today but fail to realize that their customer base or demands may increase over time. Adopting a billing platform that leaves only little margins for future growth may lead to technical issues further down the line, and if that is the case, you will then have to spend more money to effect changes.
Some Recurring Billing platforms don’t have efficient revenue tracking features
Some billing platforms are not effective when it comes to tracking monthly revenue cycles, and this could lead to huge revenue losses. This is why managers are advised to be very mindful of the kind of recurring billing software they utilize for their businesses. With a very efficiently billing platform, you should be able to track your monthly revenue expected from each customer on time. You will also be able to adjust customer lifecycle timelines to meet your unique requirements as well as the requirements of each individual customer.
Offering the same price for multiple service features
In continuation of the last paragraph, another challenge many businesses face when implementing a recurring billing model has to do with system rigidity as regards billing cycles. These days, customers are drawn to service providers that offer them different service features. The more service features you offer, the more options customers have. If you adopt a billing model that is not able to offer different pricing for different service features, your customers may have to pay more for using less, and this can be a turn-off.
To prevent a drop in customer patronage, it pays to only utilize platforms that can offer price varieties for separate features. Adopting a multi-tiered pricing strategy and incorporating such a strategy into a billing platform of your choice is the way to go.
Benefits of adopting a Recurring Billing Model
Now that you know about some of the challenges of adopting a subscription model, what then does your business stand to benefit should you adopt it?
It helps you accurately predict future revenue
Knowing with a high degree of certainty, just how much your business will rake in at the end of every billing cycle, can work wonders for you. Why so? Firstly, you can plan your expenditure several months ahead, and this can save you a lot that would have been spent on emergencies. Secondly, you will be able to do your cost analysis to ascertain your income to capital ratio.
Increased your customer base
This is one of the reasons why medium and big businesses are turning to the use of recurring billing in droves. This model allows you to scale your services in several ways. Now, you can offer varieties of the same service and price them accordingly. Offering product varieties increases the options available to your customers, and more options attract more customers. What’s more, you can do this without losing revenue in the process.
It is an adaptable pricing model
Recurring billing software is highly adaptable, and they can be fashioned to meet the unique needs of your business. With an efficient subscription billing software platform, you can adapt to customer preferences, a rise or fall in demand, and any other changes that may pose a threat to the continued existence of your business.
Making changes to your pricing policy can be done if you utilize efficient and effective recurring billing software. Before you do so, however, you need to take stock of the potential challenges your business may encounter. After doing that, the next step will be to search for a billing platform that can prevent, reduce, or manage the challenges and risks involved.