Regardless of what type of business you’re attempting to scale, there’s one clear shortcut to instant growth: Find new revenue streams within your existing customer base.
When trying to increase profits, businesses should consider how not only how to acquire new customers, but how to better leverage the ones you already have. Working to achieve greater revenue streams from your current customer base is typically a more cost-effective strategy. Why? Industry data shows acquiring new customers costs roughly five to ten times more than retaining your existing customers!
One sure way to achieve more regular revenue streams is by shifting some of your business to a recurring billing model. To start, your company leaders must ask themselves some fundamental questions: Why, when and how can recurring billing be seamlessly integrated into your already existing billing business practices? How can it be used to maximize your company’s bottom line? We’re here to help you answer those questions.
Table of Contents
1: Increase Cash Flow
Every business knows the pain of late payments and having to track down money from customers. Not only can this strain your relationships, but it can also create a bottleneck in your business’ cash flow that makes it difficult to operate smoothly. Integrating a recurring billing program eliminates that hassle and ensures your business will always get paid on time.
By having reliable cash flow, your organization will naturally have a better grip on monthly, quarterly and annual revenue projection figures. Recurring billing helps you maintain a positive customer relationship and increases the chances your customers will continue to purchase from the business.
2: Enhance Customer Relationships
Most customers who are loyal to your brand will appreciate the ability to pay without the hassle of needing to worry about the payment process itself. Instead of receiving regular invoices for products or services they already desire, the ability to implement automatic payments saves them valuable time and simplifies the checkout process.
By making payments more convenient for your customers, you’ll also achieve increased operational efficiencies. Subscription billing provides an easier path for customers to maintain their future payments, which boosts the chance your customers will stay with your business long term.
3: Improve Efficiency
One of the biggest hassles many companies is the continuous task of processing manual payments. Not only is there a greater chance for errors, but is also an inefficient use of your time, money and resources. Setting up a recurring payment schedule allows your processor to automatically manage customer billing cycles. Recurring payment programs take the friction out of payments for both sides, with a few simple tools that administer subscriber accounts — all under one, easy-to-use platform.
By automating your business’ payment processing, you can focus on running your day-to-day operations instead of tracking down payments from your customers. With the ability to easily configure customized billing frequencies, payment amounts, and billing dates, the right recurring payment platform can provide your business the payment flexibility your customers already want.
4: Reduce Declines
While many businesses implement basic card-on-file payment processing abilities, that method can create delays in the billing process. Not only do those cards expire without the customer updating the information, but they may also be replaced after being lost, stolen or reissued. Instead, your business should seek recurring billing tools with features like an account updater, which automatically maintains expiring and replacement card numbers for each card on file.
By automating the recurring billing process, this significantly reduces declined payments associated with the scenarios mentioned above. By reducing declines, your business can protect its revenue streams and avoid lost revenue from payments missed because of out-of-date customer cards.
5: Simplify Your Billing Process
The above four benefits together create one last major perk: The ability to simplify your billing processes and implement an efficient, cost-effective subscription payment plan. With real-time authorization, automation features, and consistency, recurring billing provides advantages that simplify the billing process on both ends of the payment equation.
Reducing the amount of friction between your business and your customers is one of the best methods to enhancing your customer relationships forever. Simplifying your billing process not only creates a better synergy, but it also gives your business a predictable path to scale. Recurring billing allows you to spend less time worrying about payments and more time focusing on growing the business you love.