Continuity subscription merchants have the opportunity to create highly-sought recurring revenue streams. That said, there are certain obstacles that continuity subscription merchants face. There are also a lot of factors to consider when it comes to retaining customers and increasing profit margins, including changing consumer preferences, offering multiple payment options and more.
Continuity subscription merchants are poised to win big from their line of work as the subscription industry has been growing 200% annually since 2011, according to the Harvard Business Review. In fact, business-to-consumer subscription services attracted more than 11 million subscribers in 2017.
Here are the best practices that continuity subscription merchants should keep in mind to optimize customer experience and retain customers.
Multiple Payment Methods Keep Customers Happy
Consumers value speed and convenience, making online shopping a preferred avenue for purchasing needed items. The rise in ecommerce has also given rise to multiple forms of payment, including credit and debit cards, digital gift cards, alternative methods (PayPal), and mobile wallets. Mobile has become an increasingly popular way to shop, accounting for 50% of ecommerce transactions.
Services such as Apple Pay and Samsung Pay have been on the rise to keep up with payments for continuity subscription merchants’ products and services. Alternative payment methods like PayPal have also garnered attention for ease-of-use.
The bottom line is that customers each have a preferred way to pay; not offering that method could turn valuable customers away. This is particularly true of continuity subscription merchants who are looking to keep customers around for the long-haul and who must go the extra mile to provide streamlined payment options. Offering a wide variety of payment methods and currencies is the best way to attract a wide base of customers and retain them long-term.
Continuity subscription merchants should work with a payment processor that offers a robust payment gateway with many payment options. A trusted payment processing partner can help you toggle options to best serve the needs of your customers.
Thwart Payment Issues Before They Arrive
One of the biggest challenges facing continuity subscription merchants is churn. Churn happens for a variety of reasons, including general payment issues, declined transactions, or problems updating payment information.
Card authorizations have become a popular method to avoid some of these issues. The merchant uses a small ($0 or $1) authorization to confirm the validity of the card before a transaction is made. Completed as a “pre-authorization”, no money is actually withdrawn from the actual account. It is simply a mechanism to confirm that future transactions will go through.
The best way to go about it is through a $0 authorization, but not every bank account accepts such a small authorization. Subscribers also face problems when updating their payment information, including issues updating expired credit card information, adding additional cards or changing their preferred method of payment.
Unnecessary card declines also pose a real problem and can lead to a customer service issue or a customer cancelling their subscription entirely. Card declines fall into one of two categories: a soft decline or a hard decline. The former happens when a card has exceeded its limit, if the issuer is unavailable, or if the card has insufficient funds. The latter occurs when the account has been closed, the card expires, or the card is reported stolen.
Merchants can implement auto-updater tools to avoid declines related to expired cards. These tools automatically update the payment card information, allowing subsequent charges to go through, even if the cardholder does not manually update their information.
Clearly Communicate Subscription Details
Great communication with customers can prevent misunderstandings and customer service issues. Merchants should clearly articulate (on the website, via email, and via transaction receipts) the details about subscriptions so customers know what to expect.
Sending reminder emails about upcoming charges can be a great way to stave off unnecessary chargebacks from confused customers who forget about their subscription. It can also be helpful to remind customers about when they will incur the next charge on receipts issued.
Have well-written and easily located terms and conditions posted on your website, in emails, and available through customer service lines. Also include information about your refund policy. Well-staffed customer service centers can ensure that all customer concerns are addressed in a timely, accurate manner and prevent future chargebacks.
Create a Friendly Customer Portal
Continuity subscription merchants should create a user-friendly customer portal where users can access previous purchasing and billing history. A well-groomed self-service area empowers customers to manage their subscription and billing preferences and update their payment and billing information. Putting the customer in control can promote peace-of-mind and increased loyalty. It is also a great way for merchants to maintain their own records.
Transparency, clear communication, the right payment processing tools, and customer service are all key components of a successful continuity subscription business. Working with a reputable, trusted payment processor can streamline your payments operation and ensure your subscribers remain confident in and charmed by your service.