5 Recurring Billing Mistakes to Avoid Making

Subscription-based businesses face several different challenges than straight service-based or product-based businesses. Primarily, the challenges revolve around recurring billing. Learning the top five recurring billing mistakes helps you to avoid making them in your own subscription-based business.

Lack of Charge Details

Especially when recurring billings are far and few between, you have to remind customers what the charge is for. Ensure that your charges show up on credit card statements and as bank debits with some detail as to what the charge covers. When the customer doesn’t recognize the name of your company or the reason you are charging them, they are likely to dispute the charge, even if they do not want to lose their subscription.

Not Sending Renewal Reminders

Some companies charge the client for the renewal and then send out a receipt for the charge. Give clients the opportunity to prepare for the charge. Send out renewal notices via email or regular mail. Give them a head’s up about the status of their subscription. In the end, you end up losing fewer customers this way because they know the charge is coming rather than being reminded after the fact.

Bad Customer Service

Be transparent with your customers. Make it easy for them to find your phone number, email address and other contact information. If there is a problem with your product or service or they have a billing question, ensure that there are quality customer service agents in your business to field these inquiries. Satisfied customers are less likely to debate the subscription renewal fee when it comes around.

Non-communication

More communication is better than no communication at all. Establish a system for communicating with your customers on a regular and consistent basis. Various touchpoint opportunities exist for you to communicate with customers.

  • Reminder their renewal is approaching

  • Request for an update of a credit card expiration date

  • Opportunities to upgrade or downgrade their subscription level

  • When successful payments are made or when a charge fails to process

Missing Marketing Messages

Use the communication opportunity you have with customers to mix in some marketing messaging. Remind them that their Level 1 subscription is about to automatically renew. Let them know at the same time that they can upgrade to the Level 2 membership and save 20% by doing so now, prior to their automatic renewal taking effect. Introduce a totally new subscription level, product or service.

When you avoid making these five recurring billing mistakes, you have better chances of retaining your subscribers.

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