According to research by Deloitte, about 69% of households have access to monthly billing on video streaming platforms. Indeed, subscription billing has become the key model for a business’s success.
With this initiative, 70% of companies want to bring in huge ROI from prospects. Therefore, as a business owner, you need to understand all the intricacies of this new-age software.
Do you want to know everything about subscription billing? Keep on reading to gain that knowledge!
Subscription Billing – A Comprehensive Definition
Subscription billing is a software that works on an automated payment module. You can also refer to this as a recurrent billing option. Moreover, businesses use this initiative to establish lasting relationships with their customers.
In this software, the payment to your services will be automatic, and you will have a guaranteed income.
You will have an “auto-pay” method for your services that will have a scheduled invoice. Usually, SaaS products use this membership structure to keep clients entertained.
For example, Netflix uses subscription billing and charges the user every month on a specific date.
Utilizing this initiative, you can collect payment automatically at intervals, both monthly or yearly. Furthermore, the client needs to have approved payment information to initiate authentic charges. Due to this, your business will not have any redundant prospects.
With this payment model, you can easily send invoices to your customers as scheduled without any manual work!
The amount will be recurrent on the services the client has chosen.
Subscription Billing Models and Benefits
This software is versatile enough to offer possibilities to individual consumers and enterprise clients. Moreover, businesses have the flexibility to charge their clients in whichever arraignments they seem fit. Your business will have a recurrent cash inflow that keeps your customers fulfilled based on your chosen model.
Indeed, this billing option has maintained a steady growth and facilitated a thriving business model.
Billing subscriptions has minimized the high fees and upfront costs of development, allowing new businesses to grow and prevail. Consequently, the saturated price model has brought in new prospects from other countries, enhancing the market revenue.
B2C SaaS Model
Netflix is the biggest example of B2C subscription billing initiatives. In this model, the consumers make an initial payment, and they understand that they will be charged at a consistent and regular interval.
There are two types of B2C models:
- Flat rates are the fixed set of recurrent prices for the features
- Tiered for recurrent pricing of multiple unit packages from an offer
B2B SaaS Model
Salesforce is the greatest example of the B2B model in subscription billing. It is where companies offer memberships for automated tools based on an enterprise’s requirements.
For example, a cloud computing software service sold by a company will be billed directly to the client’s bank account.
The different types of B2B subscriptions are:
- Per-unit pricing is a recurrent bill charged as a whole
- Per-user pricing charges the company based on the usage of the employees
Indeed, subscription billing is a new-age solution that can generate substantial ROI. With this, businesses invoke their optimal management and feature capabilities in the services. Moreover, there is a self-service initiative for the clients, which brings in better workflows.
As a business, you can enhance your relationship with your clients by introducing this billing method.