A few years ago, recurring payments were mainly used by mobile operators and banks. However, this technology is gaining popularity, even offline business owners seek to implement it in their processes. Before diving into discussing the peculiarities and advantages of recurring payments, let’s understand their essence.
Recurring payments are an automated payment method. When a client enters his bank card or electronic wallet information, a specific amount is automatically deducted from his bank account on a regular basis, and access to your service is extended.
How do recurring payments work?
The types of recurring payments will depend on the frequency of debiting funds. The specified frequency can be daily, weekly, monthly, or even annual.
In any case, for any type of recurring payment, the user initially confirms the amount and terms of payment and is informed about future transactions. The client has to be aware of all the conditions in advance. In addition, the user should always have a choice about whether to agree to a subscription or refuse it. By offering an unsubscribe button, you inspire trust in the client and show respect for him.
Benefits of recurring payments for your business
Enabling automatic payments helps optimize business processes, increase sales, and make them more stable. Let’s take a closer look.
Undoubtedly, the first sale is usually the most difficult because it is necessary to overcome the barrier of distrust and objections. Subscriptions are typically inexpensive, and allow you to engage the customer in the sales funnel and help him make his first purchase. Having received a positive user experience from your product, the client becomes more loyal to you. Thus, he can be offered other, more expensive services to establish long-term relationships.
Also, the subscription serves as an additional hook for those customers who were going to leave your website without completing their purchase. A subscription to your product with a significant discount for the first month can be suggested to them. The full amount will be deducted automatically beginning with the next period.
Any business knows how much time and money it takes to prepare and issue invoices: bank fees for transfers, postage costs, telephone expenses, employee salaries, and much more. Nevertheless, you can automate this process, reduce costs significantly, and free up time for solving strategic problems. Subscriptions will make your processes more convenient, smoother, and faster. Besides, your employees will be able to monitor the system and solve problems with non-standard payments.
Recurring payments are a guarantee of constant profit. A subscription, unlike regular sales, implies long-term interaction with the client and a constant flow of money from him. The more customers subscribe to you now, the higher your earnings will be in the future. In addition, during a drawdown season in advertising and marketing, you can be sure that the company will profit from its already existing customer base.
Thanks to recurring payments, you can reduce the purchase price visually and divide it into several small payments. Hence, installments will be obtained without the participation of the bank and the need to demand payment from the client. This method can be applied to any type of business, especially if a client does not easily agree to large, immediate spending.
Another smart trick to ensure profit from a client. Currently, each person has a huge number of all kinds of subscriptions. Sometimes people tend to forget about some of them, and even if they stop using the service, they still pay for the subscription. However, it is worth remembering the rules of good manners. The client should always have an option to refuse autopayments, this will increase the credibility of your business when subscribing and reduce the number of complaints that money was debited without the user’s consent.
Do not forget about the benefits of recurrent payments for users. This payment method solves one of the most vexing problems for customers: making the same payment on time and constantly entering bank card information. Now the user will not forget to make the payment. He will not need to spend time on this, and he will not lose access to your product and service even for a minute, which will strengthen his loyalty further.
What type of business are recurring payments suitable for?
Recurring payments were previously only available to a small number of business fields. Nonetheless, nowadays, automatic debits are a powerful tool available to any company, individual entrepreneur, and even self-employed professional. While not all companies have utilized this technology, your business has an opportunity to gain a decent competitive advantage and outperform your rivals.
What if you have an offline company?
Of course, this function cannot be activated when paying in cash or through a terminal. However, draw your attention to QR codes, which are gaining great popularity. You can use them to subscribe to your services, just print a banner and place it in a visible place so that anyone can scan it and subscribe to your services.
How to enable recurring payments?
There are several ways to enable autopayments. Customers will be able to pay for your services by entering their bank card details only once, and then the subscription will be charged automatically. This is a great opportunity to grow your business.
With regular payments, you make your customers permanent!