It is no coincidence that large companies such as Spotify, Netflix, HBO Go and Amazon adopt the subscription as a payment method. If we review history a bit, we will see that, for example, this model has been used by newspapers and magazines for years.
Y for those who own a digital productthis model can be very effective and with various benefitsboth for those who offer it and for their clients.
At , there are more than 40 thousand registered subscription products and more than 2.5 million subscribers.
We have prepared this article to introduce you to the subscription model and also give you some strategic advice if you already use it but also if you want to know more. I think it is worth reading it and evaluating if it fits for your digital product. Let’s go?
What is a subscription service?
Simplifying, the subscription service is a business and payment model in which the customer pays a regular fee for a continuous period of time, and automatically, to have access to a certain product or service.
It is enough to keep in mind the examples that I cited at the beginning of this article and there will be no secrets. If you are wondering what the advantage is for your digital product, I will explain it to you.
5 reasons to use the subscription model
But first, I will tell you the 5 main reasons for you to start using the subscription model in your business.
The first advantage of recurring payment is the possibility of retaining customers for a longer period of time. This provides more opportunities to present the differential features of the product, have greater engagement of the customer base and increase the LTV (Customer Lifetime Value, or customer lifetime value). And it also makes it easier to offer other products for your foundation afterwards.
Recurrence is the model that will guarantee you a greater forecast of what your income will be in the coming months and will make you suffer less from the effects of market oscillations and . The biggest challenge this implies is ensuring that your customer has the best experience to keep renewing their subscription.
- time optimization
As the collections will be automatic through , you will have fewer daily worries and you will be able to take advantage of your time for the production of new content or even new products.
By charging on a recurring basis by card, you will not use the total limit of your client’s card, since recurrence is something different from payment in installments. In other words, recurrence is an excellent cost-benefit ratio, in addition to continuing to ensure your monthly billing.
The feeling of community is very well applied to subscription products. In addition to creating a feeling of community, the customer knows that other people have also chosen to buy that product and therefore feels more confident that he has made a good choice.
How can ‘s subscription service be strategic for your business and how to configure it?
Reports, segmentations, plan changes, creation of different offers… In short, you can count on tools that help automate day-to-day processes, in addition to bringing more intelligence to your strategy.
In addition, the convenience for customers is enormous, since the payment is made automatically through credit card, bank payment request (automatically sent to the subscriber) and other means of payment.
Learn about the main benefits of this payment model within :
Product Evaluation Period — Trial
Subscription products give buyers the right to experience the digital product they want to buy for a limited time. After all, who doesn’t like to try a product/service before deciding to buy it?
Allowing a buyer to try a product, who is not yet sure if it will meet their expectations, decreases the chances of refunds and consequently can increase the conversion rates of the product. You can offer a Trial Period for:
- Capture leads: Whether the user subscribes or not, the trial is an excellent way to capture leads. After this, send an offer of another product (without trial) or keep the lead warm for a next sale. And, of course: study the rejections generated by the subscription offer to eliminate them.
- As a sales pitch: show the user that they will only pay if they like what you offer and that you are so good that you guarantee the quality of your product/service by allowing them to try it for free.
- Interact with the buyer: create moments of interaction through our tools. Show him that you are there, by his side!
- Conquer the recognition of the audience: let your client know you. Prepare a light and captivating content that leaves him with a taste in the mouth of “I want more”. Don’t show him the gold, just tell him you have it!
- Use it as aftermarket: Prepare a congratulatory and welcome email after the Trial for those who subscribe. It shows that you are present and that you have much more to offer.
Sending automatic reports
The functionality of automatic subscription reports allows Producers and Producers to configure reports that will be generated periodically automatically, in order to obtain as much information as possible about their activities on the platform.
Currently, you can access the following reports:
- General Sales Report: lists in detail all the transactions that were created or updated in the selected period. This report contains: buyer information, product name or if it is a subscription, among other data.
- Subscription Report: lists all subscriptions created or updated in the period you select. This report contains: subscriber information, subscription code, subscription status and much more.
- Smart Payments Report: contains all smart payment transactions that were created in the selected period. This report contains: Information about the buyer and the product and the date of payment.
- And much more.
with more details about this functionality.
Customize charging retries in the subscription product
One of the solutions is the personalization of the payment retries. Currently, the payment system makes up to 5 retries automatically on all subscriptions after a charge has been rejected by the subscriber’s card.
Now you can customize this process, determining what is the maximum number of automatic retries that the system will process and in what maximum period of time.
In addition, it is possible to configure it so that the payment date of the subscribers becomes the date on which the payment has actually been successful (in one of the retries).
to set it up right now.
Subscription renewal email alert
You can configure the sending of an email to your customers to remind them that the renewal of their subscriptions is approaching, determining how many days in advance the email will be sent.
A piece of advice is to configure this tool for plans with greater periodicities, such as semi-annual and annual, for example.
on how to do it in a few steps.
Monitor subscription product cancellation metrics
You may know all the metrics of your subscription products in a section of called Subscription Cancellations. There you will find the relevant data on subscription cancellations so that you can better manage your business. These are:
- General cancellation information: here you check the number of subscriptions that were canceled during the period you want and their respective cancellation rate.
- Cancellation rate evolution graph: see the monthly comparison of the cancellation numbers of your products and plans.
- Graph on the sources of cancellations: View who was responsible for the cancellations of each month, within the options: Canceled by the Client, Canceled by the Administrator and Canceled by the Seller.
- Cancellation overview table: access general data for each of the days that the selected period contemplates.
- Important cancellation indicators such as LT, LTV and average paid recurrences that will allow you to draw conclusions about how long on average your subscribers remain active and what is the liquid value that they usually spend with your product before requesting cancellation.
that tells you more details about how to follow the cancellation metrics.
Define the periodicity
Weekly, monthly, bimonthly, quarterly, half-yearly or annually. At , you have the freedom to choose the frequency according to your strategy.
In addition, within the same product, you can create various plans with different periodicities, to better meet the needs and/or the current context of your audience.
That is all? No way!
Find out what else you can do with the subscription service:
- Reprocess the collection of a late recurrence.
- Offer a change of plan for your subscribers according to the need of each one.
- The subscriber may alter the credit card on file and the billing date for future recurrences.
- Cancellation can be requested at any time.
- Possibility of payment in installments in plans with periodicities greater than monthly.
- Edit the value of existing plans and offers for new subscribers.
And much more!
Take advantage and create your subscription product right now:
Let us know what you think of the subscription model in the comments!
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