These days, subscription models are part and parcel of many businesses worldwide and across various sectors. From setting up recurring payments for providers like Amazon to ongoing pet food subscriptions to tools and services you use for your business or personal life so you don’t forget and have access to what you need when you need it, subscription models are here to stay.
However, when setting up a subscription model for your business, whether you’re a dedicated subscription box service sending out packages each month to your subscribers or you’re offering subscription plans alongside one-off purchases, you need to know how to get things done to facilitate a smooth experience for both you and your customers.
Is A Subscription Model A Good Fit?
It’s safe to say that not all businesses would benefit from a subscription model, but it is a great revenue model to consider as it brings recurring income that is a little more “guaranteed”. Clothing retailers, for example, aren’t always geared up for this type of purchase, although there are successful examples mostly in niche areas such as sports clothing or tailored outfits. Grocery retailers might find that a subscription box model isn’t the best route for them to take, while those providing access to software and supplying treat boxes for both humans and pets from confectionery retailers or pet supply stores can benefit massively.
This Hubspot article on subscription models is a pretty helpful guide if you’d like to learn a bit more about the underlying business model.
Taking Payments With A Subscription Model
Subscriptions involve automatic payments taken from the customer’s payment source before the order is shipped. Unlike regular purchases, a subscription model requires explicit consent from the customer for automatic payments on a set date for a set amount. This ethical approach is crucial for building trust with your customers.
This requires you to keep recurring card on file payments so you can process the payment without the customer having to do so. To enable this, you need to set up a payment gateway, a service that authorizes credit card or direct payments processing for e-commerce businesses. This means you need the payment gateway in place to make this as easy as possible.
Creating A Seamless Experience
Your signup process needs to be seamless yet explicit about your intention each step of the way. Let’s say you only deal in subscription items and cannot make one-off purchases. Then, your website will be filled with messages that evaluate the nature of the agreement they are entering into and the relevant dates and information they need regarding their payments, data being stored, and ongoing charges they can expect, as well as a way to cancel if they change their mind.
But suppose you’re adding a subscription service to an already profitable retail ecommerce store. In that case, you need to integrate your model so it’s not an added chore but more of a tick box choice they can select at checkout, much like when shopping on Amazon, and this feature is offered. Again, you need to be explicit in your messaging for people clicking this option so they understand they are not making a one-off purchase, so there is no confusion.
Introducing a subscription model to your website can be a powerful strategy for securing ongoing sales and revenue. However, it’s crucial to carefully consider whether this approach is right for you and your customers and to introduce it correctly for the best results. Keep in mind that there may be challenges, such as card payments not going through or incorrect card details being kept on file, but with the right planning and execution, these can be overcome. This article has more tips on optimizing your e-commerce website, which could be a good read if you’re interested in actionable tips to improve the flow and user experience. Then you’ll be able to convert more customers!
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