What is Subscription Payment?
Subscription is a type of business model expected to new customer behavior. Instead of a one-off purchase separately, they decide to make a payment for the items they have to use regularly each period of time (daily, weekly, monthly, or yearly). It is a subscription payment (also called recurring payment). It’s the way how a win-win contract between store owners and shoppers is created.
How Subscription Payment benefits your store
#1 Boost sales by increasing repeated purchases
It’s not easy to persuade someone to pay money for a product. If a customer commits to buying your goods many times, it’s so fabulous, isn’t it?
Subscription payment will be a great way for you to make more revenues without burning your money on advertising. According to recent Harvard Business School researches, "increasing customer retention rates by 5%” can boost your profits by 25% to 95%.
Magenest subscription extension will help you to create a variety of packages and flexible plans to fit with customers’ requirement just by a few clicks.
When some people think that subscription is applied for certain business models such as Netflix, Amazon, and Spotify, it works well with almost all industries. All you need is some creativity.
For example, SurfAir is a company providing subscription flying services for frequent travelers. They’re proud that they’re “The future of flying” when customers pay a monthly fee for airplane flights makes complete sense.
#2 Forecast cash flow precisely
Finance management is crucial for every store-owners. As an administrator, you have to build a cash flow forecast with high accuracy.
The problem is that you can not predict exactly how many people will visit your store as well as which products will be sold and on top of sales.
Fortunately, you minimize the error rate thanks to subscription plans in Magento subscription extension. All the important information is in your hand including purchased product, pricing, cycle, and payment method.
Subscription payment assists you evaluate your revenue more exactly so that it’s easier to orient your business strategy in the next periods. Moreover, Magenest extension accepts both Paypal and Authorize.net that facilitates your smooth cash flow between your business and customers.
Read more: 13 Proven Timeless Tips for Small Business Owners
#3 Control inventory and provision
It’s necessary for every merchant to have effective inventory management. In other words, you have to control and oversee ordering inventory, storage of inventory, and control the amount of product for sale. This calculation is a big challenge for any manager.
Thanks to Magento subscription, you can collect accurate data about orders in months, even in years. It’s as easy as pie when your task is just to record what your identified customers are going to buy in a schedule.
#4 Improve customers' shopping experience
How to convince a customer to choose your brand instead of others? You might run a lot of marketing campaigns; however, the golden key to creating a great customer experience while your potential clients visit your store.
So what are the advantages of subscription payment from the buyer’s point of view?
- Time-saving: Shoppers now have tons of choices for different products and services. But too many choices are also a problem. They consume a lot of time to gather information about brand names and then compare them in order to find out the most appropriate item. This process might be repeated several times because customers need to use the item many times. It sounds really exhausting, right? Therefore, the subscription model helps your customer reduce this time.
- Frequent sufficient supply: As mentioned above, customers might use a product or service many times. By registering subscription packages, they can know the quantity of the item they need with certainty in identified intervals.
- Lower price: According to recent surveys, end consumer decisions are driven by the price and quality of products and price is still the top priority. Subscription products always provide a lower price compared to those without the subscription, which is a big plus in customers’ eyes.
- Special discount: Customers who register for a subscription have a higher chance to be offered a special discount like coupons or vouchers It’s so attractive that no shoppers can miss it.
- Personal financial management: Like your store, customers need to manage their own personal financial plans. With the subscription model, they can easily foresee what they are going to spend money on in the future.
Once customers’ shopping experience is improved, your sales would increase significantly as well. The likelihood of buyers switching and exposing to other brands is reduced. In the end, Magento 2 Subscription and Recurring Payments enable store-owners to create a stable relationship with shoppers, which helps our brand can gain more loyal customers.
Read more: Customer Experience Management: Everything You Should Know
In conclusion, Magento 2 Subscription and Recurring Payments extension allow you to set up a new approach for your customers. They can buy your products and services either in subscription or individually.
The subscription business model has been on the top trend in recent years. Many enterprises and companies applied it and obtained excellent achievements. I’m sure that you heard a lot about the success stories of Amazon or Nestle. So if it is not time to install Magento 2 Subscription and Recurring Payment extension, what are you waiting for?