Done correctly, automation can be a huge money-saver. This is why so many merchants embrace recurring payments. Every billing cycle, money automatically comes into their accounts without their having to actively send out new invoices.
But this only represents the tip of the iceberg. There are many additional benefits that merchants receive when they enable recurring payments, including:
1. More Predictable Cash Flow
With recurring payments, you know (in advance) how much money your business will receive each billing cycle. Consequently, you can make better informed decisions about the future, including:
- Inventory management (for physical goods)
- New launches (for both products and services)
- Supply chain management
- Employee staffing (hiring and firing)
2. Higher Customer Retention
With one-off purchases, you must constantly source extra revenue streams — a process that requires drumming up repeat business or finding new customers. But with recurring billing, you retain existing customers unless they deliberately cancel future payments.
This has the added benefit of reducing your marketing costs. Securing new customers is usually more expensive than retaining existing ones.
3. Easier Client Acquisition
Recurring billing allows you to price your products and services more competitively. Rather than ask prospective customers to pay one lump sum, you can spread the cost over several billing cycles, making it easier for them to justify doing business with you.
Most customers would scoff at the idea of paying $1,200 for an annual gym membership. But 12 monthly installments of $100 sounds a lot more reasonable.
4. Fewer Late Bills
Chasing down late payments can be a huge drain on company resources — both in terms of money and time. But with recurring billing, you don't have to worry about delinquent payments as much. The money automatically comes into your account without your having to follow up or send out reminders.
5. More Immediate Feedback
Recurring payments help shorten the sales cycle, allowing you to benefit from more immediate feedback and faster course corrections.
Perhaps you noticed a sudden dip in subscriptions. Or maybe your company experienced a rapid uptick in sales. Either way, the cause can probably be traced back to a recent change in your marketing, product or service (during the previous billing cycle):
- If the change was bad, you can fix it immediately.
- If the change was good, you can duplicate it and scale up.
6. Environmental & Financial Savings
Recurring billing happens electronically, meaning you don't have to pay for postage or mail out physical invoices and receipts.
By abandoning paper-based payment processing, you can enjoy financial savings of up to 65 percent. Better still, you can reduce your carbon footprint and reap substantial environmental savings as well.
Ready to Take Advantage of These Recurring Payment Benefits?
At BluePay, we make setting up recurring billing easy — whether you want to process credit and debit cards, make direct deposit payments or initiate bank transfers.