The One Key to a Successful Subscription Model

While sitting in a session titled No Recurring Nightmares: How a Subscription Billing Model Can Work for You, at the 2016 CNP Expo, the panel of four experts discussed the keys to a successful subscription model.

There were numerous suggestions thrown around, but they all had one common denominator: Communication.

And this comes with a good story about how communication failures occur at even the highest levels of subscription models.

Challenges of a Successful Subscription Model are Twofold

When running a subscription billing business, there are active churn issues and passive churn issues that merchants must overcome. An example of an active churn issue is when the subscription product is, frankly, subpar, and a consumer cancels the subscription.

A passive example is when a consumer forgets to renew a subscription; or perhaps receives a new credit card and forgets to update his/her recurring billing information.

The solution to these challenges is communication: An amply timed e-mail reminder, or a phone call to the consumer, notifying them of the coming bill payment and/or a successful payment. Consumers forget, and it’s the merchant’s job to remind them.

We feel, for many reasons, that customer support is going to become a priority for e-commerce businesses. In one form or another, e-commerce merchants will be placing more emphasis on customer support.

Communication Fails at the Highest Levels

My story…

About twenty years ago I received an offer from a popular music magazine: Six months free with no obligation to renew if I wasn’t satisfied.

Why not? I’m a rock and roll history buff. Sounded great.

So I received the magazine each week, thinking I would love it. But I didn’t, for a number of reasons. I signed on for the music (read: rock and roll) news and features. I didn’t care (or like) what it had to say otherwise.

Around the sixth month, I received a phone call from a representative.

“How do you like our magazine,” she asked.

“I really don’t to be honest,” said I. By her reaction, I don’t think they hear my reaction that often.

“Oh. I’m sorry. May I ask why?”

So I gave her the litany above, and we politely said our goodbyes.

But the magazine kept coming, for more than a year. And I would read the items that interested me.

Then I started getting letters, saying I owed money for my ‘subscription,’ which I didn’t because I never really subscribed. They had no payment information from me whatsoever.

Eventually, I stopped receiving the magazine. But the episode left me with a tarnished image of the magazine, particularly its attempt to make me pay for a subscription I never had.

Successful Subscription Billing with Instabill

Instabill has offered subscription billing merchant accounts since 2001 for magazines, memberships for health clubs, continuity and nutraceuticals. Our merchant account managers are reachable at 1-800-318-2713 Monday through Friday from 8 a.m. until 6 p.m. U.S. Eastern time, or by clicking the live chat option below.

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