Subscription-based business models have multiple benefits including encouraging customer success, improving buyer retention, capitalizing on convenience, predicting revenue, and many more. Today, subscription models are used in nearly every industry by powerhouse companies such as Netflix, Ipsy, and Microsoft. With the right technology in place, web design, and digital development, your company too can benefit from a strategically designed subscription model.
To begin, what is a subscription-based business model and how does it work? A subscription business model is a recurring revenue model in which customers pay a weekly, monthly, or yearly fee in exchange for products or services, in your business’s case, this may look like a digital product or service such as a membership to an app. Customers can renew their subscription after a certain period of time. For a digital business, this model offers an opportunity to leverage customer relationships to create a steady stream of income.
Both the consumer and the business benefit from a subscription-based business model. Customers have the convenience of automatically repurchasing a product or service that they know they’re going to need in the future. Companies can enjoy the perks of retaining customers for future sales rather than needing to re-engage them on a more frequent basis. This also secures monthly recurring revenue (MRR), which may be the deciding factor in staying afloat during difficult business cycles.
If you’re looking to join the subscription economy, one of the most important things you need to do is make sure you’re technologically prepared for it. With technology constantly evolving and consumer preferences being ever-changing, what at first glance seems like a simple business model now requires a checklist of technologies necessary to grow your online business. As experts in web design and development, software development, mobile app development, and e-commerce development, we’re sharing our top tips on the must-have tech essentials for a successful subscription-based digital platform.
High Site Speed.
We live in a face-paced world, with impatient consumers. Research shows bounce rates increase as load times go up. Ask yourself, when a customer enters your URL into their browser and presses “enter,” how fast does your website display all of its components? First impressions are important, and subscriptions emphasize consumer relationships. Think about it, how bad does it look if you’re late for a first date? You want to ensure the user’s first perception of your website’s speed is lightning-fast. As website and app developers, we work to ensure quality speed on both iOS and Android platforms. With subscription-based businesses, reliability is key and it all starts with your digital platform’s speed and interface.
Recurring Billing System.
Having a recurring billing system is going to be the key to any subscription and membership business. This is where the merchant automatically charges the customer for whatever goods or services are being sold at a schedule that has been arranged beforehand. A subscription is like a contract between a company and consumer, the customer agrees to pay for a product or service for some time and the business fulfills that offer so long as the customer completes their recurring payments. When the contract is up, the customer has the option to renew or cancel their subscription. A recurring billing system is a payment system that is set up by the subscriber when they give their credit card information so that they can be billed regularly. Payments will continue to be taken until the subscriber cancels the subscription or it expires.
Having this set in stone is a win-win for both the company and its customers. The company enjoys having consistent revenue and customers don’t have to forget about making payments every month. This system provides one of the basic elements for boosting customer retention in subscription and membership businesses.
Order Management System.
Next, you’ll need to have proficient order management and subscription management system in place to ensure that subscribers get specified products and services at different periods. Sometimes, customers get to choose the frequency of their orders while, at other times, products are available 24/7. We recommend choosing a subscription management software option that is flexible, provides a good merchant and shopper experience and has all of the features that meet your individual needs.
For example, with SaaS businesses, the product is available around the clock and all the customer has to do is log in to use it. This technology is useful for membership and subscription businesses that provide services at different periods, per customer. A subscription box company, on the other hand, will have different needs. Handling different customer requirements when it comes to scheduling goods and services can be challenging. However, with an order management system, you can be confident that your customers will get the products and services they want at the precise time that they want them.
Customer Relationship Management Software.
With a recurring revenue model, the consumer company relationship goes much deeper than a one-time buyer. That’s why knowing your customers on a deep level is the best way to be successful. The most effective way to do that is to develop a CRM strategy. CRM stands for customer relationship management. A robust CRM system gives a great boost to the business and improves the conversion of potential customers to long-term clients. CRMs also help businesses stay on top of key performance indicators (KPIs) and track customer engagements. While a big part of their function is to store customer and prospect data, CRMs are much more than electronic filing systems.
Operating streamlined CRM benefits both businesses and customers. Not only do they help organize and manage contacts, but they also keep a detailed account of every customer interaction. This paves the way for more personalized experiences. Today consumers have come to expect personalization, and with the opportunities of technology being endless, eCommerce brands can capitalize on this. BitCot has expertise in developing high-quality Customer Relationship Management on all of the top CRM providers.
Payment Recovery Solutions.
You always need a safety net, that’s where payment recovery software comes in, also known as dunning or dunning software, to manage credit card payment declines. This is how it works: when the solution you’ve used for billing identifies a charge that has been declined on the customer’s account, the software will automatically send a notification to the customer to let him or her know that their card has failed. Many subscriptions believe it’s the most effective option for payment recovery. The software is often sought out because a large part of a subscription and membership-based business involves reducing customer churn. This metric is paramount for subscription and membership businesses, so it makes sense that many entrepreneurs and business owners use dunning software to improve customer retention.
Support Software.
It should be clear by now that we are emphasizing the customer relationship with a technological focus. Having a smart and well-organized support software and having multiple channels where consumers can engage with you is crucial. It should be very easy for your customers to get in touch when they have a problem. If your support process is challenging or absent, your customers will likely turn to the competition. Some questions to ask yourself/your team about your support plan include:
• Is it easy to navigate consumers to the support page on your website or app?
• If consumers engage with you on social media, is there a clear path to support from those channels?
• Will you offer a chatbox?
• Will you have a queuing system?
Your support plan should also include clear expectations for who responds to support requests and how long wait times will be. Communication is key, so if customers will not receive instant support, be sure to make it clear how long it should take until they hear back from the company.
Marketing Automation and Strategic Web Design.
Last but not least, marketing, web design, and app interface are essential for customer retention. Marketing automation includes email marketing and a multitude of other functions to help you market and sell your subscriptions, memberships, etc. Target different members based on repetitive behavior when using your services or goods. Your platform should also be able to keep track of buyer behavior. The appeal of your digital interface is also important for keeping consumers. Is your platform user-friendly? Is it appealing to the eye? We cover all of this ground in our digital transformation services, where we help companies build competitive advantage and achieve market leadership by implementing strategic technology that equips your business for the future. We will work closely with your team to understand its processes and develop a meaningful digital strategy. We will then help you choose the right technology for your organization, one that’s tested, tried, and true.
Like any business endeavor, there are many aspects to consider before launching your subscription-based business. Ensuring that your subscription technology is in the right place will help set you up for success and eliminate the chances for any surprises to pop up later. Remember the key is keeping those customers happy! Fast site speeds, flexible subscription management tools, clear-cut support, and a CRM strategy will all help you accomplish this. If you would like to talk your subscription technology over with an e-commerce expert, you can schedule a free 15-minute consultation here.
