Recurring payments – or how to turn a customer into a subscriber
Product News / 22.11.2021
At some point in our lives, most of us have signed up for one subscription or another. Whether a gym membership, a weekly or monthly newspaper, and magazine, utility bills, paying your phone bill every month, and interestingly, you can also sign up for a car service or even have shaving kits delivered to your doorstep every month these days. The list is nearly endless.
But what makes such subscriptions so popular?
Sure, they offer convenience. A customer no longer needs to enter their payment details every time they want a product or service delivered. They can simply sign up for a recurring payment and get on with their lives.
But what are recurring payments, how do they work, and how can you turn a customer into a subscriber? We take a closer look.
Table of Contents
What are recurring payments?
Simply put, recurring payments are just what the name implies. Payments that are debited from a customer’s account during a specific billing cycle, such as monthly or annually.
These payments are automatically deducted from a customer’s account for the delivery of goods or services and are based on a predetermined schedule.
How do recurring payments work?
Whether a Microsoft Office payment for a set period of time, a Netflix subscription so that you can watch your favourite shows, or a creativity box that arrives at your doorstep for your kids, recurring payments use the same method irrespective of what the product or service being delivered is.
Essentially, the customer chooses the duration of the payment – e.g. monthly, quarterly, annually, etc., then enters their account details onto the payment page, and hey presto!
Their account details are saved so that the merchant can bill them regularly while offering their products or services on a regular basis, too.
What is a recurring revenue business model?
Although it’s not ideal for all business types, a recurring revenue business model is gaining significant popularity. This is because of all the benefits it offers.
For starters, you are not only able to turn a loyal customer into a subscriber for your services, which means easier forecasting for expected income. But also, you create your business model in such a way as to provide your customers with a particular experience, and that’s, hopefully, a positive one.
In short, a recurring revenue business model is one that offers customers a specific product or service regularly, while charging your customers periodically for their service with automatic payments and not on a once-off basis.
How to turn a customer into a subscriber
There are several ways of turning your customers into subscribers. Here are 7 ideas you might consider:
1. Improve your online store
Consider offering your customers a checkbox to sign up for regular news and updates, a White Paper, news of newly published articles on your site, or more.
You’d also need to make sure your online store offers the subscription model while being user-friendly with a brilliant design and simplicity of usage.
2. Offer your customers exclusive deals
Another way of turning a customer into a subscriber is to leverage your email marketing resources and use them to offer your customers coupons or discounts for upcoming sales.
3. Add buttons to your social media channels
These buttons can be sign-up buttons where they agree to receive communications from your business. This way, you’ll ensure that your loyal customers stay that way as you offer them value in return.
4. Make your customers’ journey a personalised one
By ensuring that your customers feel a personal connection with your business, making them feel special and valued, you’ll go a long way to ensure that they turn into subscribers, as they won’t be able to get that sense of value elsewhere. Your content is crucial for this step.
5. Start with list segmentation
You will also want to segment your lists to ensure you target the right customers with the right offers.
6. Offer benefits rather than features
The features are nice. But the benefits are even nicer. By emphasising which pain points your product or service will resolve, you’ll ensure your customer is on your side, willing to try what you’re offering them.
7. Provide social proof
As always, social proof or the good old-fashioned word-of-mouth marketing is crucial. Your customers need to see other happy customers who’ve signed up for your offering in order to be convinced that your product or service is right for them. Showcasing testimonials of satisfied customers is one way of doing this.
How to start accepting payments with subscriptions
The back-end of accepting payments with subscriptions can be time-consuming and expensive. However, if you are thinking of implementing a recurring payments business model, then this is a must.
You will also need to consider the fact that your customers’ credit cards will expire at some point, that they may not have sufficient funds in their accounts, etc., and these are all points your business subscription model needs to consider.
In general, though, here are the steps to signing up for recurring payments with myPOS:
- Create your free merchant account
- Create your Checkout store
- You choose the method of integration in terms of the platform which you use for your online shop (PrestaShop, Woocommerce, OpenCart, etc.) and you then choose the programming language in which your site or application is written (such as PHP, Java, iOS, etc.). Alternatively, if you use another programming language, you can rewrite your commands using our API.
This is where the specifics for creating recurring payments begin:
- You get in touch with our team from Integrations/Risk/Support), and you indicate that you would like to use tokenisation of cards and recurring payments.
- Your integration will then be examined by the Risk team and if they don’t have any further questions, your Checkout store is then verified and you may use tokenisation of cards.
- The Integrations team is available to assist you if there are any difficulties with the technical part of the integration.
If you’re ready to start accepting payments with subscriptions, you’re on the right path to predictable payment forecasting, increased revenue streams, more loyal customers, and more.
While setting up recurring payments for your customers may not be the easiest action to take, it is certainly the road many businesses are taking these days to ensure customer loyalty and better revenue streams.
Of course, you need to ensure that when you provide your product or service that you do this well so that you don’t leave customers disappointed and looking to cancel their subscription.
In addition, your recurring payment business model needs to be flawless so that you cater to all possibilities that may crop up in the course of payments acceptance. However, by getting this part right, you will up your sales and boost customer satisfaction.
Disclaimer: Please be aware that the contents of this article and the myPOS Blog in general should not be interpreted as a legal, monetary, tax or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.