eCommerce has grown exponentially in a matter of years, and consumers are now even more comfortable with buying and making payments online. It has also brought a wide range of products and services into our homes and workplaces that are accessible at the click of a button. One of the more interesting developments of this movement is the rise of the subscription economy and subsequently subscription billing.
Consumers today are less willing to make expensive product purchases, and the trend is towards free trials and lower monthly subscriptions. The rise of on demand services such as Netflix and Spotify has further fueled consumer uptake of the subscription model, and many firms that previously relied on hefty upfront monetary commitments have adapted. Great leads have been taken by industry giants such as Adobe, that transitioned from once-off product purchases with yearly licenses to a cloud repository offering, with buffet-style subscription options.
Businesses are quick to embrace subscription billing, here’s why:
The subscription model is a win-win for both consumers and businesses; it gives customers more flexibility and security whilst maintaining the convenience of an online purchase, and offers many other benefits:
- Automatic renewals: Customers never run out of a product or service.
- Simplified budgeting for customers: Generally, subscriptions are a flat rate or based on usage.
- Facilitate upselling and self-service: Customers can more easily scale up (or down) their subscription packages.
- Accurately predict revenue: It is easier for a business to forecast and plan when their revenue is based on subscription growth and recurring collections.
- Customer retention: Due to the easy ‘opt out’ nature of subscriptions, businesses need to be innovative and build strong relationships with their customers.
South African start-ups and established businesses are adopting subscription billing for these same reasons. Brands such as Sage, Showmax and BoxOffice, Netflix, Simfy Africa, Rubybox, Wine-of-the month-Club and The Daily Dish amongst them.
Who is powering subscription payments in South Africa?
Moving away from once-off sales transactions to setting up and managing recurring subscription billing is more complex to automate and scale. It should also be done in a way that retains the convenience factor of buying online.
Recurring billing and collections management platform Billdozer.com makes the entire process from sign up, to contract management, payment collection and reconciliation as simple as possible. Billdozer has the unique ability to streamline and automate these labour-intensive and disparate processes, creating a seamless experience for both service providers and their customers.
When seeking software tools to facilitate subscriptions, businesses need to ensure that they find a solution that caters for every part of the process. This includes capturing mandates, managing the subscriptions, recurring billing, integration with a debit order gateway and reconciliation with application and accounting software.