Hello everybody! Welcome back to our “Give me 5!” series, where we share five useful eCommerce tips that will help improve your strategies and get you on the road to success.
In our latest episode, Alina Motorga, 2Checkout (now Verifone)’s Product Manager, talks about the key features subscription businesses should offer to clients to acquire more customers and boost customer retention.
Acquiring customers is a crucial factor when it comes to revenue growth. For SaaS businesses, retaining your customers is the key to getting the wheels turning and driving your business towards success.
Here are five essential features that subscription businesses should offer to their customers:
1. Freemiums and free trials
Before you start thinking of your retention plans, first, you need to acquire new customers. One great way to do that in subscriptions is to develop a freemium model strategy. For example, you can offer a limited feature set for free, without a time limit. This will enable you to engage new customers and prove the value of your product or service to them. Then, later on, you can upgrade those customers to paying tiers by offering the service as a premium subscription with more features and functions.
Another strategy that you can implement is the free trial model. With this model, you offer a fully functional product, or service, with all its features – but for a limited time, usually 7, 14, or 30 days.
Free trials and freemiums are key tactics to get users on board with subscriptions, even when they haven’t yet decided to commit to a purchase.
2. Optimized checkout
To make sure your customers are converting, you need to have a seamless checkout experience in place. Make sure your cart meets the following optimization checklist:
First is adequate checkout form length. One way to optimize the checkout process is by shortening the user form and requesting only essential billing and delivery details. Extensive forms can discourage shoppers from completing a purchase.
Next is pre-filled contact details. For your returning customers, the checkout page should automatically pre-fill their contact details.
Finally, it’s optimal if your cart is localized in the visitor’s language. Customers are 70% more likely to make a purchase if the cart is displayed in their language.
3. Different payment methods
Closely related to the checkout is how your customers will pay for your service, and the type of payment method that you will make available for your clients. Whether you are selling locally or internationally, providing different payment methods for clients is essential. Allow your customers to complete their subscription purchase or renewal with the payment method of their choice. In many countries, credit cards are not the most popular payment method.
For example, are you planning on selling in Brazil? You need to make sure you have Boleto Bancario as a checkout option. German users prefer PayPal Express. If you are looking to the Chinese market, then AliPay is an option you need to have at the checkout.
Make sure that your shopping cart supports all popular local payment methods specific to your target markets.
4. Renewal mechanisms
When it comes to subscriptions, customer churn is of utmost importance. One of the best ways to fight churn is to have the right renewal mechanisms in place. There are two renewal models that can help you minimize your customer churn: Auto-Renewals and Manual Renewals.
First off, Auto-Renewals is a billing model where the customer’s payment details are charged automatically at each billing interval, without the customer having to take any action.
Show customers that auto-renew is more convenient for them. After all, they get to enjoy an uninterrupted service and never have to worry about losing access to your product, including their stored preferences, tasks, projects, or other account information. They also won’t have to re-enter payment details after a subscription ends.
Manual Renewals, on the other hand, require the customer to take action to renew their subscription by authorizing the renewal payment at each billing interval. Payment reminders are a great way to avoid customer churn if you are using a Manual Renewal billing model, by letting your customers know when a renewal due date is approaching or that it is overdue.
5. Pause subscriptions
Sometimes your customers want to cancel their subscriptions for several reasons, such as less frequent use of your service, lack of access to the service for a while, or the desire to reduce their costs temporarily.
On average, however, 10% of customers who cancel their subscriptions are simply looking to pause.
Therefore, it might benefit you to provide your subscribers with the option to pause their subscriptions and suspend their automatic charges until a later date, to avoid having them cancel the subscription altogether. This will build unparalleled trust and loyalty among your customer base and prevent voluntary churn.
You have now discovered five key features every subscription business should offer their customers; your next step is to implement and test them out for yourself.
Thanks a lot for watching! We hope you enjoyed this video and its insights! Feel free to share any suggestions or other tips in the comments below, and we’ll see you next time, with more awesome content!
Looking to find out how integrating with a CPQ solution will help your B2B business thrive? Then check out our previous “Give me 5!” episode here!