Digital Subscriptions: How To Get Paid
Growing digital and technology companies is not easy, but this is something the UK is increasingly successful at achieving, on a global scale. According to the Tech Nation 2017 report, there are over 1.6 million employed in the sector, with annual turnover already at £170 billion.
In 2016, digital tech companies in the UK received “£6.8billion in venture capital and private equity investment”, which is 50% more than other leading European countries. We aren’t known for building Google, and Facebook-sized enterprises, but we have thousands of public and private companies in every sector selling software, technology, digital tools, games and apps around the world.
Many of these companies start without investment. European and British investors are, as a rule, more cautious than those in America. Many prefer to see revenue and solid profit & loss accounts before investing money, which means startups that use subscription pricing are in an enviable position.
Subscription models bring peace of mind for entrepreneurs. Gaming companies, developers, entertainment brands, publishers, and artists are also profiting from this booming time for digital downloads and subscriptions. Subscribers prove that no matter what you are selling – from games to software (SaaS) – your business can grow, scale and generate sustainable revenue and profits.
Which means secure, cost effective and user-friendly payment solutions are essential to the success of digital subscriptions companies.
Best Practices for Online Subscription Companies
When it comes to digital subscriptions, including software and games, pricing is an art-form. You need to clearly demonstrate why they need your service. It is somewhat easier selling event tickets, apps, music, games and eBooks, since these are consumer products, usually with a subscription option for keen fans.
It is also worth remembering that, for companies and creatives with a consumer audience, sales channels and payment options are already an integral part of popular platforms, such as Amazon, eBay, Ticketmaster, iStore and Google Play.
Whereas, software companies that generate subscription revenue, are working to attract a business audience and need to implement their own payment solution. Games producers, artists, singers and others who benefit from online revenue should also consider implementing their own payment system, if they want to keep more revenue from themselves and give a little less to Apple. There are numerous choices on the market.
Innovation in the payment sector has been prolific in recent years, with many payment companies offering a range of options. Selecting the right one can make the difference between success and failure to generate subscription revenue.
Here are a few things you need to consider:
#1: Is the checkout easy to navigate?
Getting a potential subscriber to checkout is the moment of truth. Even after a 14 or 30-day free trial, they could still walk away. Customers have come to expect a smooth checkout process. Make sure as much information as possible auto-populates from their accounts, especially when they have already had a trial – it should be as simple as inputting payment details and clicking ‘Subscribe.’
#2: Can they easily subscribe on a mobile device?
Don’t make them work for it. You want their business. They need to know you can accommodate them using a smartphone to complete a monthly payment option. It should only take a few clicks, especially if you are selling other digital goods, such as event tickets or downloadable products. Job done.
#3: Are you demonstrating value at every subscription level?
Most software companies offer a range of pricing tiers, from the lowest to the highest, with an ‘Enterprise’ option for larger accounts. With each, make sure you are showing customers how you are creating value and the different levels of support they get at each price point.
#4: Offer discounts to improve cashflow
Paying monthly is perfect for a customer’s cashflow, but getting money in advance is better for your business. Give your customers an incentive for paying every quarter, six months, or even annually. The more they pay upfront, the larger discount you should offer. Just make sure you factor this correctly into cashflow and profit and loss accounts.
With the right combination of user-experience design, pitching your price points according to your target market and discounts, you can build a solid pricing model around any subscription business. Ensure you are working with a payment service provider that can support your customers and make it easy for them to pay and for you to receive subscription revenue.
For more advice on taking online subscription payments call +44 (0) 808 149 6295 or email [email protected]