Everyone seems to have their subscription for any product or service nowadays. Whether it is for magazine, video and music streaming, or pay-per-view sports broadcasts, people are hooked in paying for subscription plans. And providers of these services generate considerable revenue with their subscription billing because of such a trend.
Although some may have signed up and paid for a subscription service, they may not be very familiar with the term ‘subscription billing’. It is a charging process that allows providers to bill clients on a particular schedule for a specific service or consumer product.
This billing scheme has already been implemented by many types of businesses. However, subscription billing has not been taken up by everyone. Thus, providers have to endure the late payments, delinquent payers, and other billing issues. Today, all these have been resolved through software designed to collect and manage subscription billing.
Software firms are doing a tremendous job enabling this program, which makes the entire billing procedure run seamlessly and improves customer satisfaction. With additional payment security and great time saving features, many businesses opt for subscription billing methods to remain competitive in the market and take advantage of its benefits.
A Detailed Explanation
Recurring billing helps companies generate “slightly-sure revenues” since it instantly bills the clients in a particular payment schedule. Before everything else, the customers have to sign up and consent to the agreement by giving their payment data to the merchants. This allows the provider to deduct the payment from the client’s credit or debit card account.
This method applies not only to individual clients but to corporate accounts as well. Firms that offers services such as CRM software and digital marketing use subscription billing to charge their clients who availed their offerings. The corporate clients are regularly billed until the relationship end.
The subscription-based company may offer a different form of subscription arrangement designed exclusively to meet their needs when it comes to corporate customers. This is another form of boosting the customer experience.
It can be a unique payment schedule, a tiered subscription, or additional features in their subscription; anything that will potentially retain the corporate client. This scheme makes it easy for the provider to make adjustments because of the automated billing procedure.
For those under the B2C or business-to-consumer businesses, their subscription billing will begin through the first payment made by the client for the product or service they’ve availed.
After that comes the subscription agreement asking for their consent to regularly charge them at a certain amount at a specific day or date. Then, the client gains access to the platform, or the firm delivers the item to them.
On the other hand, the business-to-business scheme provides subscription membership for services such as accounting software, marketing tools, software design, and other similar services to another corporate client. In these types of subscription billing, the provider can modify a specific plan for every particular corporate client.
It can be per-use subscription pricing or tiered pricing, depending on the type of subscription plan that their client needs. This also allows more flexibility to the provider since it can present its preferences and payment terms. Regardless of the terms of the agreement, once the deal is closed, the provider has made “guaranteed revenue” for the next couple of months or so.
Ultimately, clients prefer subscription billing because they no longer have to deal with forgotten dues. For someone who is too caught up with work or other personal stuff, one will fail to pay their dues at some point. This can also mean paying additional late fees. Through subscription billing, the payment is promptly deducted without any annoying reminders from the providers.