How to Increase Recurring Revenue With Subscription Billing

The goal of any business is to increase its monthly recurring revenue. With monthly recurring revenue, you acquire a customer once and then continue to get revenue from them every month.

This means you can spend less time worrying about how to find new customers every month. And recurring revenue adds a new level of predictability to your business. It becomes easier to forecast cash flow and budget for expenses.

Plus, businesses with recurring revenue models are built to scale. If you’re looking for ways to increase your recurring revenue, you should consider offering your customers a subscription service.

4 Different Types of Subscription Models

Subscription services are not new, but this business model has become more prevalent in recent years. Gartner predicted that by 2023, 75% of companies that sell to consumers would offer subscription services.

Subscription services are incredibly flexible, and there are many different ways you can offer this to your customers. Here are three of the most popular subscription models:

  1. Services: If you run a service-based business, you can offer this service as a subscription to your customers. Customers commit to using your service for a set period of time and are automatically billed every month. In exchange, they could receive a discount or other perks.
  2. Products: If you sell products, then you can easily turn this into a subscription-based model. One of the most popular ways companies have done this is by offering subscription boxes. Customers pay a set price, and every month, they receive a new box in the mail with their favorite products.
  3. Memberships: Memberships work well for companies that offer a lot of digital content. Members pay a monthly or annual fee and receive access to videos, courses, and other educational content.

How to Get Started With Subscription Billing

You’ll need to figure out the right pricing before getting your subscription set up. What will customers be willing to pay every month for the product or service you’re offering?

And it’s important to consider what type of payment method you’ll offer. Will customers be able to update their payment information on their own? Can the customer cancel the service on their own, or will they need to contact your company?

Customer retention will be a critical factor in growing a subscription-based business model. So how will you ensure that your subscription continues to stay relevant and exciting to your current customers? It’s always a good idea to keep an eye on the competition and watch for changes in your industry and customer preferences.

It’ll take some type to figure out how to get your subscription right, but it’s worth the effort. When done right, subscription billing can bring in a consistent source of revenue into your business and create lifelong customers that are excited about your business.

To your success!

Written by Brian Johnson