Many businesses are entering the subscription business market, and they are increasing the competition in the market. Suppose you are part of the subscription billing market or want to become part of this highly competitive subscription business ecosystem. In that case, you must know the subscription billing model that you want to opt for.
Many recurring billing models have different subscription billing solutions to help you implement. If you have command over the concept of these billing models, then you can use them the way you want. They will decide the success of your business. As the businesses in the market are so many, retailers sometimes feel confused about the billing model. Before you get into the details of various subscription billing models, you must know that you can improve the billing models as per your business requirements.
Eliminate Your Fears About Subscription Billing Models
1. Freemium
When you plan freemiums for your SaaS products, the first and foremost advice is always to know the thin line between freemium and the free trial. Freemium means you offer the basic version of your product to your customers for free. After that, they can use freemium as long as they want. However, in a free trial, complete access is usually given to the customer to use and know the effectiveness of your product. But this access is for a limited time. Once the deadline reaches the customer will have to get paid subscriptions for the SaaS product to continue using it.
It would help if you were cautious while planning the freemiums and free trials for your customers because they can help and ruin your business. Therefore, it is better to get help from professionals before you finally offer freemium to your customers.
2. Tiered Fixed Fee
One of the widely used subscription billing models is a tiered fixed fee, where the customer can select from various subscription plans. The plans have a fixed price. Then, the customer is charged recurrently as per the subscription billing model that he has subscribed to. Most businesses that are entering the market love subscription billing for the feasibility of predicting revenue. This subscription pricing model gives the maximum liberty for predicting the recurring revenue and devise future policies accordingly.
The subscription plans’ price remains fixed, so it is not difficult to read the customer sales and purchase data. You can get business insights that help you make a futuristic subscription business strategy. Many subscription management platforms give you the flexibility to offer your customers tiered fixed-fee plans.
3. Pay-per-Use
One of the reasons behind the success of the subscription billing business model is customer satisfaction. The customer remains satisfied that he is using precisely that product or service for which he is paying the recurring charges. However, to implement the pay-per-use subscription billing model, you need to have perfectly metered services.
If you have metered services, you can define the right price for a single unit and charge your customer based on the number of units he consumes. That way, the charges that the customer pay remain dependent on the usage of the customer. People sometimes fail to identify that whether their services or SaaS product can be metered or not. It is better to get help from professionals in this regard. There are subscription management platforms that offer customers consultancy as well.
4. Pay As You Go
It would help if you kept in mind the difference between the pay as you go and the pay-per-use billing model. However, pay as you go means the billing model that makes customers pay their recurring charges in advance. However, customers love this subscription billing model because it frees them to form the liability to keep paying the recurring charges after intervals. This means the customer will subscribe to products or services. He will keep paying charges as long as he is using the services. He is not liable to pay if he does not use the subscription services.
This freedom that the pay-as-you-go billing model provides makes it very difficult to predict the recurring revenue. Though you bring more customers on board, think twice before you adopt this billing model.
5. Hybrid Billing Model
Now that you have basic knowledge about the basic billing models in the subscription business market, you need to know the model that offers maximum flexibility to improvise it. That’s called a hybrid subscription billing model. There are many businesses in the market that do not use a specified subscription billing model. Instead, they have a mix of different billing models—hybrid subscription billing.
If it is difficult for you to decide on a recurring billing model for your business, then you can use a hybrid billing model through your subscription billing solution. Always remember your billing model is linked with your recurring payment system. A perfect billing model will help you get payments timely and maintain the flow of recurring revenue streams.
Customize Subscription Billing Model
As per the customize billing model, you do not offer some fixed price for subscription plans. Instead, you let customers use the customized billing model. Again, the flexibility that you can offer customers through this billing model is maximum. It is not easy to manage. If you want to offer to customize billing to your customers, you need a robust subscription billing and recurring payment system. This software will help you bring maximum subscribers on board and keep them satisfied.
If you are looking for billing software for a small business or a large enterprise, you need Subscription Flow. Here you can opt for the subscription billing models mentioned above. You can keep your customers happy so that they will stay longer. Remember, the subscription billing model is not just a single software or a platform, but the success of the whole subscription management system depends on your billing model. It is the prerequisite to maintain the flow of your recurring revenue stream.
