An increasingly large number of companies are taking advantage of the growing success of subscription-based services and implementing their own. These kinds of business models offer convenience to customers, as items are essentially hand-picked and delivered to their door. Organizations benefit as well, as individualizing orders based on consumers' wants and needs keeps clients happy and coming back for more.
There are a number of important aspects of subscription initiatives businesses need to take into consideration, from order management to fulfillment and beyond. One of the most vital, however, is payment processing. This element keeps the subscription process moving smoothly. To ensure this portion of their subscription service runs without issue and keeps customers satisfied, there are a few things companies should know about payment processing:
Compliance is key
Many organizations are already aware of the risks that come with accepting credit and debit cards. Businesses frequently hear about large-scale data breaches that leave sensitive information unprotected and available to external, dangerous sources. As consumers themselves, company leaders know keeping those materials secure is a necessity. The Payment Card Industry also realized the importance of data safety, and decided to take action.
The PCI created its own Data Security Standards, which give enterprises actionable steps they can take to protect client information during processing, storage or transmittal of important data. Although this framework is not mandatory under any government regulations, failing to comply with the guidelines could have seriously negative consequences for companies, including loss of trust, revenue and expensive penalties. The PCI Security Standards Council created differing requirements depending on the number of credit card transactions businesses process on an annual basis, while also developing a basic 12-step plan for organizations to follow, at the very least.
Knowing the subscription company they choose is PCI compliant will mean the world to customers. Consumers want to know organizations are doing everything they can to protect their clientele and their information. This adherence will improve the confidence people have in the partners they opt to do business with, while providing an extra level of security for enterprises.
"The cancelation process should be just as simple as the renewal procedure."
Make paying a breeze
The decision to pay for a subscription-based service can be difficult for consumers from the very beginning. They weigh the pros and cons of regular deliveries: Is it worth the money? Do I really need the products? How many steps do I have to complete to sign up? The key is to make the procedure as easy as possible for clients, especially when it comes time for renewal or people want to cancel. Although no organization wants to lose customers, it is the way business works. Making it simple for consumers to cancel the services will ensure they leave with a positive feeling. Maybe the cost was too much at the time, and they'll return in the future. Maybe they know someone who will benefit from the service and the experience more than they would have. Easy and efficient cancelation steps will help clientele see the pros more than the cons.
Renewal can be just as troubling as canceling. It's understandable for businesses to attempt to upsell during this time. After all, people are getting ready to decide whether a new contract is what they want, so why not add some extras? There is a tasteful way to do this, but organizations may be more successful with add-ons if they discuss different options during personalized communication before it's time to re-up – even three to six months or a year out, according to CIO. This gives clients time to do their research, manage their budget and decide if the additional goods or services really are worth it. Being too pushy only makes customers more wary of a business's motives and therefore, less likely to want to continue.
Dunning is common
Everyone's experienced a missed or failed payment at some point in their history as a consumer. These errors happen for a number of reasons: credit cards reach their limit, are expired, are shut down due to potential fraud, are lost, and the list goes on. While this is challenging for any company, it's especially difficult for subscription businesses that utilize recurring billing. As a result, many organizations resort to dunning, or making persistent demands for funds from someone to repay debt.
"SFG can help companies manage problems stemming from payment issues."
It can be stressful for enterprises to complete this process themselves, although it is a necessary evil. Insufficient or unavailable funds don't help anybody, and subscription services will likely suffer most. To avoid dunning, companies have to decide between two avenues. The first option requires organizations to set up a management system for anticipating expiration dates, suspending accounts, distributing email reminders, discontinuing product delivery for nonresponsive customers, retrying declined cards and more, according to Kissmetrics. The second is working with a third-party service provider who can take on the dunning responsibility. Partners like SFG can offer assistance with this task, as well as order management, fulfillment, delivery and packaging.
Understanding the necessities of the payment process for subscription-based companies is one of the most important aspects of the business model. These organizations need a procedure that is simple and efficient for customers, while also complying to critical security standards. By working with a partner like SFG, these enterprises can not only flourish, but truly succeed by placing more difficult responsibilities in the hands of educated professionals.