One of the best ways to handle payments for services is through recurring billing. Recurring billing involves collecting payment from a customer at regular intervals (typically monthly) while they are using your services. Recurring billing has several benefits:
- Makes payment easier for customers
- Helps increase the LTV (lifetime value) of your customers
- Sets the stage for long term income
- Automates the payment process
Recurring billing is commonly known as a solution best fitted for Saas vendors, but other industries can use it as well.
- Membership websites
- Self-storage industry
- Cell phone companies
- Web hosting
The major benefit that this model offers is convenience. Once the payment information is set up, no further action is required on the customer’s end. This means they do not have to worry about making late payments, remembering when their payments are due, or any of the other issues that come along with traditional billing.
By following these simple tips, you will see higher conversions and even increase the LTV of your customers using recurring billing.
Unclutter Your Checkout Page
One of the biggest mistakes a Saas vendor or any E-Commerce business can make is cluttering up the checkout page. Once a prospect has reached the payment screen, they have been fully qualified and are committed to signing up for a subscription. When you overload the customer with special offers, 20 different payment options, and other unnecessary features, you can easily lose a customer.
Your payment screen should have the following characteristics:
- Be Clutter free
- Have minimal outbound links
- Clearly define what the customer has to do
- Be simple to understand
Offer 100% Transparency
The last thing any customer wants is to be tricked or feel as though they have been ripped off. With businesses that use recurring billing, there is ample opportunity to engage in trickery. However, if you want to increase the amount of conversion you get, you need to avoid deceptive practices completely. The best way to build a prospect’s trust is to have transparency in your services.
- Legal ramifications
- Gaining a negative reputation
- Cancelled subscriptions
Security is a major concern for customers. Since customers enter their personal information such as their address, date of birth, and credit card number, they need a sense of security when they arrive to the payment screen. This is even more important for recurring billing because the customer’s payment information is being stored with company.
Taking steps such as using HTTP Secure to encrypt/decrypt page requests or using a PCIO compliant payment processor can provide a lot of comfort to prospective customers. Most reputable payment processing companies do an excellent job of providing secure checkout.
The checkout process needs to have as few steps as possible. The more pages and information a customer has to enter, the more time they have to rethink and reconsider whether or not they want to sign up. The goal is to get customers through the checkout process as quickly as possible. Recurring billing naturally provides convenience because customers only have to enter their payment information once instead of on a monthly basis. There are steps companies can take to make the entire process even more convenient.
For instance, allowing customers to copy their billing address over from their account information eliminates the need for them to have to re-enter the same data again. Be sure that you are only collecting the necessary information from customers as well. Generally it’s best to limit the data collected to:
- Payment information
Any other information you would like for analytical purposes can be collected after checkout is completed.
Increasing conversions from recurring billing is all about providing a great user experience. If you can provide security, ease of use, and convenience, recurring billing can be the ultimate payment solution.