The maturation of SaaS products and other forms of downloadable software continues to shape subscription renewals. Since the beginning of the change, the demand for multi-period subscription billing continues to grow.
Legacy products (e.g. magazines, newspapers, and cable TV) still practice straightforward subscription billing. Online sellers, however, are always after faster solutions, which drives them to adopt subscription billing models.
Digital vendors fear their customers might refuse contracts when they receive new bills on pre-defined schedules. These fears are valid, which makes understanding different selling options even more important.
Customer renewals follow two traditional models: automatic and manual.
The Automatic Option
Instead of settling for traditional calendars and spreadsheets, Metasaas.com recommends using the advanced tools or techniques for renewals. Automatic subscription falls under this category.
This option is currently the most common; customers provide payment information, get the product, and receive bills at fixed dates. If they pay on time, they will have access to the product or service. This includes subscriptions to cable TV, anti-virus software, or data storage fees.
Since customers know about the billing amount, they are comfortable with automatic payments.
- Continuous until customers cancel
- Increased conversion rates and minimized incremental costs
- Does not need manual intervention from marketer
The Manual Option
This unpopular option involves customers not receiving bills until they agree to the charge. This form of subscription renewal requires customers to re-enter payment details; they can also submit payment information.
Utility bills fall under this category. Gas and electricity are important, but you complete the payment manually first before approving the amount of payment.
- Possibly lower levels of customer complaints
- Increased conversion rates
- Easily adjustable renewal prices
- Real market feedback
Whatever path you choose, always consider your customers first. Study their purchasing behavior and then decide. As online shoppers evolve, vendors can find more opportunities to improve their subscription billing.