Should you charge one yearly sum, monthly, or even more frequent than that? Ultimately, you have to make that decision for yourself. But in general, recurring billing works better for businesses than single, lump-sum payments.
Giving your customers this payment option can give you these benefits:
- Earn more business:
Customers in general are more willing to pay a low-fee multiple times instead of a lump fee a single time. Plus set it and forget it pays in the end, because it is out of sight and out of mind for the consumer.
- Manage your business more easily:
Instead of riding big waves and fighting through the lean times, you get a more even income stream throughout the year. It makes managing your business so much simpler.
- Avoid contracts and get more sales:
If you charge a recurring fee, you can have customers sign up for your services via a subscription-based model. With fewer hoops to jump through, prospects are more willing to sign up for your services.
- You can offer custom pricing plans:
If your customers pay a lump sum, do they have the option to customize the way they pay for your services? It’s easier to show them what they pay for and what they get when you use recurring billing.
- Cut late payments:
If your customer pays a huge expense once per year, they’re more likely to get in a pinch and pay late. But if you charge them on a regular basis, and they pay lower amounts, they’re much more likely to pay those off in a timely manner.
- Happier customers:
If you’re a B2C business, most consumers are happier to pay a lower price on a monthly basis. Not only that, but if you have automatic billing options, they don’t even have to remember to pay you. That keeps them – and you – happier.
- You save money:
Because of the efficiency of recurring billing, and the fact that it’s easier to collect on, you spend less money and less time on billing. Also, consider how much money you save on paper and ink. Around 20 bills sent each month equals 7 pounds of paper for the entire year. And you also help the environment too – saving greenhouse gases, gasoline for transporting the paper, and wastewater that’s a byproduct of its production.
- Get more upselling opportunities:
You can use your recurring billing payment option to give customers the opportunity to upgrade their subscriptions (if you sell that type of product/service).
An Even Bigger Benefit with Account Updater
If you are still concerned about the administrative side of recurring billing - especially when credit card companies are re-issuing cards more frequently due to security breaches - consider Solupay's Account Updater feature. With Solupay's gateway services, we can connect with the issuers and gather the new card information, whether it is due to an expired card or a re-issued card. If the card has expired we work with the issuer to get the updated expiration date... and you don't miss a payment. This feature saves merchants a lot of time and money getting updated information on reccuring billing customers.
Want to learn more about Recurring Billing and Solupay? Our Recurring Billing products make the process easy to manage, so you can focus on achieving these benefits without any hassles.