Recurring Billing: Options for Ecommerce and SaaS Startups

If you are a small independent software provider, a web app developer offering a SaaS product or you are developing a digital product, before you start marketing to attract your new customers you need to decide how to accept online payments. A couple options to explore are direct merchant accounts and Internet Payment Service Providers, each have there unique advantages, disadvantages and costs.

 

Our estimated costs below are for a small business such as a startup SaaS or ecommerce merchant selling subscription plans or memberships with an average transaction amount of around $25 and with $3000 total sales volume per month:

 

Direct Merchant Accounts

These are typical fees for ecommerce or SaaS businesses primarily selling recurring subscriptions, with a direct merchant account and a gateway.

 

Merchant Account

Processing/ discount rate (combined qualified & non qual & international): 2.75%
Transaction fee (per transaction): $0.30
Monthly fee (monthly): $30
Statement fee (monthly): $10
Chargeback fee: $25
Yearly fee (annually): $80
Setup fee (one time): $200
  • $280 to get started, including setup and annual fees.
  • Processing discount rate is $82.50 + $36/ month or $1422 annually
  • Monthly fees are $40/ month or $480 annually
  • The total cost of chargebacks is around $360 per year.
    • The cost of chargebacks, for a typical merchant that is successfully managing their fraud risks resulting in a low chargeback ratio of 0.5%
    • (1440 annual number of transactions) x 0.005= 7.2 chargebacks per year
    • The fee of $25/ chargeback is $180 annually
    • Loss of charged back sales is about $25 each, $180 annually
Merchant account total annual fees add up to $2542, or about 7.06% of total sales.

 

Payments Gateway

Once you have a merchant account you will need a payments gateway to process online transactions. authorize.net is one of the most popular:
Transaction fee (per transaction): $0.10
Batch fee (daily): $0.25
Per month fee (monthly): $20
Fraud detection (monthly): $10
Recurring Billing (monthly): $10
Customer relationship/ Vault (monthly): $20
Setup fee (one time): $100
  • $100 to get started, including setup and annual fees
  • Transaction fees are $12/ month, or $144 annually
  • Batch fees are $7.50/ month, or $90 annually
  • Fraud, recurring billing and vault fees are $60/ month, or $720 annually
All gateway costs added up for the full year is $1054. Including merchant account costs of $2542. With annual sales of $36,000, fees calculate to about 9.99 % fees.

 

Subscriptions software

For our example business with monthly 120 transactions of $25 each equaling $3000 of sales per month, the fees for a recurring software provider like Chargify, Recurly or Spreedly are as follows:
  • Chargify= $99/ month, or $1200 annually
  • Recurly= $29/ month + $24= $53/ month, or $636 annually
  • Spreedly=$20/ month + $24= $44/ month, or $528 annually
The average yearly cost of processing recurring payments with a direct merchant account, payments gateway and subscriptions software is 11.5%- 13.3% of total sales.

 

The Pros and Cons

Some advantages of a using a direct merchant account, gateway and recurring billing software provider:
  • Having control and ownership of customer data being stored in the payment gateway
  • As a business grows, the overall cost of payment processing decreases
  • Flexible subscription billing models
  • Hosted payment pages reduce PCI compliance requirements

Some of the disadvantages:

  • Several complex integrations and multiple back-ends for administration is required
  • Programming and development needed for subscription management, consumer cancelations etc.
  • Merchant account application and approval processes usually take several weeks
  • Personal guarantees are generally required
  • Changing products, plans or business models usually requires re-qualifying for a new merchant account

Internet Payment Service Providers

Ecommerce and SaaS startups can leverage some of the advanced functionality of IPSPs (often called resellers as they are the “merchant of record”) for their recurring subscription payment processing. IPSPs typically include some additional features such as affiliate networks and software delivery fulfillment.

Popular IPSP businesses that offer recurring payments for subscriptions are Clickbank, 2Checkout, Plimus and Fastspring:

  • Clickbank= $50 per product and 9.9% for items under $40, or $3614 annually for one product
  • 2Checkout = $50 Startup fee and 5.5% +$0.50/ transaction, or $2750 annually
  • Plimus= 10% or $3600 annually
  • Fastspring= 5.9%+ $0.95 (or flat 8.9%), or $3204 annually

The cost of chargebacks is going to be around the same amount: $360 per year. The total average yearly cost of processing recurring payments with an IPSP ranges between 8.6% and 11% of annual sales.

The Pros and Cons

Some advantages of a using an IPSP/ Reseller:
  • Quick application and approvals
  • Transparent, predictable pricing
  • Easy integrations, usually “copy/ paste” HTML code with no programming required
  • Low startup costs
  • Flexibility to quickly test new products and subscription plans

Some of the disadvantages:

  • High per transaction cost compared to a merchant account
  • Unfamiliar branding on payment pages and shown on consumer paper statements (example: CLKBANK )
  • No control or ownership of consumer data, the startup is locked in as it grows
  • Slow cash flow, settlement frequency of once or twice a month, with 30 day delays
  • Lost sales due to unsuccessful fraud screening (some IPSPs call consumers to verify sales)

Another Option 

Recurring Subscriptions for SaaS, Web Apps and Digital Products

Simplified Ecommerce allows you to manage all your billing and subscription plans for your SaaS web apps and digital products. Recurring billing with no programming and integrations as simple as copy/ pasting a link. Everything is included to make it easy to start accepting online credit cards and echecks:

  • Payment gateway, onetime and recurring billing, chargeback protection and affiliate marketing built in.
  • Easy, friendly interfaces for customizing all elements of your payment pages, with no CSS or programing knowledge needed.
  • Your customers can easily view their purchases and subscriptions, cancel their subscription, or submit an inquiry about their charges. It’s built in, with no programming, integration or development needed.
  • All payment data is stored securely in our gateway vault. You can transition seamlessly change merchant accounts any time without worrying about payment data being locked in or losing your customers. Keep all your affiliate relationships, fraud and risk management, integrations, custom payment pages and configurations.

 

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Chargify’s Pricing Changes: Reactions to Passionate Customers

Recently Chargify revised their pricing strategy, unfortunately for a lot of people it was a sudden move and a tough pill to swallow as it meant an unexpected increase in their costs, and for most of their customers it meant that they immediately moved from using Chargify with a plan that allowed under 50 active subscriptions/ customers for free, to a $99 monthly fee for any business with one or more subscriptions.
 
We’ve seen the impact that changing a pricing strategy can have when fellow SaaS businesses Zen Desk  and Recurly recently changed things up on their customers. It’s difficult to evaluate if customers and prospects will understand, forgive and forget these missteps as time passes or the trust and respect that these companies once had is lost forever. 
 

“The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controvesy” (Martin Luther King, Jr.)… I think the same goes for the measure of a company, how they react when they screwup, how they own up to their mistakes and how they respect and communicate with customers that feel they’ve been screwed says a lot about the character of the business.

Reaction

David Houser, Founder of the Grasshopper Group (parent company of Chargify) and Lance Walley, CEO of Chargify immersed themselves into the online community once they realized how Chargify communicated and executed the pricing change really pissed off their customers. They were personally on the front lines, responding to support requests and discussions on their internal support systems as well as replying to public Twitter messages, blog posts, even TechCrunch and a couple threads on Hacker News. There was barely a mention of the price change online that didn’t have a personal response from Lance or David. It isn’t just that they replied, they stood up and said, “Yeah, we messed up the way we did this, but we are here now, talk to us; you can call us, email us, twitter us, post a comment… we are listening, and we appreciate your feedback”. 
 
They acted on that feedback too. Quickly introducing a “Bootstrap Plan” attempting to help existing customers that have less than 100 subscriptions for $39, while enforcing that it’s impossible for them to continue to provide the level of support they want to deliver to their customers by offering a free plan. A few days later they also introduced a “Launch Plan” for new customers at $39/ month for 10 paying subscribers and community based support (no access to 24/7 phone/ mail/ twitter support).
 
Were these reactions too little to late? Only time will tell, but I think they are doing all the right things in regards to communicating their regret, explaining why they made this change and what they are going to do to earn their customer’s trust back…
 

Why

To help people understand why Charify changed their pricing, David’s explanation on his blog goes beyond just saying something like ‘We want to provide better service and grow a better business, so we need to charge/ charge more’. First, he explains that they know they made a mistake, they know what the mistake was, they are going to learn from it and communicate with their customers better and work to earn their trust back. If Grasshopper group is as transparent with this as they have been in the past with things like their marketing, I wouldn’t be surprised if there will be a detailed post mortem with plenty of facts figures and lessons learned to help to understand why they made this change, sharing how everyone can learn from their mistakes. 
 
One particular figure that stands out for me in David’s transparent post is that just under 1% of their customers were actually paying customers. Their marketing mentions they have around 3000 customers… lets imagine that all these customers were on their old plan for up to 10,000 subscribers (their most expensive tier in their new plan), thats about 30 businesses paying $750/ month… Not a lot of revenue to develop secure products with great features and deliver 24/7US based phone support.
 
Lance’s blog post reiterates that it’s expensive to run a business, especially one dealing with payments, even with a parent company helping out. It costs real money to be PCI compliant along with providing support and Chargify needs to be independently profitable for it to continue to be a viable business. Chargify’s original strategy assumed that small businesses would grow quickly, and offering a free entry level plan would provide fertile soil for startups to grow into their paid plans to create revenue for the company. It just didn’t work out that way.  I recently read a great post by Ben Chestnut, cofounder of MailChimp with lots of data and figures regarding their great success with offering a Freemium plan… it’s a long difficult road and it takes a lot of attempts to get the pricing, product and customer base just right.
 

Trust

The title of David’s blog post says a lot –  ”How To Break The Trust Of Your Customers In Just One Day…” and to help address those concerns Chargify has sent an email to customers stating that all their plans now have a 12 month grandfathering guarantee. If prices or plans change in the future, existing customers are still charged according to their old pricing for a year after the change.
 
Online payments is a difficult industry with Confusing Fees and Cryptic Charges (part2) making it difficult to evaluate the different options for Recurring Billing for Ecommerce and SaaS Startups.
 
With Simplified Ecommerce as a future secondary competitor to Chargify, I’ve been following them closely for a long time and have huge amounts of respect for their products, people and especially the Grasshopper Group and their movement for empowering Entrepreneurs (I get moved every time I see this Video). I think they’ll bounce back, but only time will tell how this has affected the future of their business. One thing that is obvious today is that David and Lance are standup, class acts, and how they and their team stood in a time of challenge and controversy sets a great example for me personally and all fellow Entrepreneurs.
 

 

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Merchant Accounts and Online Payments

Blogs and Articles like Demystifying Merchant Accounts are great resources to help ecommerce entrepreneurs with learning the basics of a complicated industry. An ecommerce business has a lot of moving parts, and online payments is vital, but overly complicated and difficult.
Startups and small businesses shouldn’t need to deal with the steep learning curves of becoming a guru in online payments, consumer fraud and risk management to be successful in selling their products online.  They should leverage existing products and companies that already are payments professionals so that business owners can focus on developing and growing their own businesses and products. Similar to how a businesses may take advantage of outsourcing for accounting, marketing or software development, online payments are critical to success, so it’s smart to outsource with an experienced partner that works together with entrepreneurs to provide a simple, turnkey payments solution.

 

When researching your online payments provider remember to consider the following:

Time

 

  • Applications: Consider the amount and complexity of the paper work required. A certain amount of information about you and your business is vital for compliance and underwriting, but digging up utility bills, bank statements and 3 years of personnel and corporate financial statements… takes up a lot of time and energy you could be using for growing your business.
  • Compliance: Do a google search for PCI compliance. It’s the most confusing, convoluted…I’ll rant another time, lets just say my advice is to never touch or store any payment information unless your sales are over 6 figures per month. Your Payments provider should provide a PCI level 1 compliant “tokenized vault” to ease this responsibility for you.
  • Integrations: All integrations take time and distract your developers from building your product, some API’s are more developer friendly then others. Keep in mind that your provider may need to certify or approve your integration, sometimes causing weeks of waiting to hear from them.

Below is an example of expected timelines from one of the largest ecommerce processor’s “gateway certification” manual:

“All timeframes listed below are an estimate of [processor name omitted to avoid being sued or something crazy like that] response times during the certification process. Time required for your own development is not included in these timeframes. Expectations for certification and live dates should be set accordingly.

- All timeframes may be subject to change depending on the volume of incoming requests and our resource availability.
- Source IP Addition/Changes: 1 to 2 days
- Script Review and Results: 10 to 12 days
- Technical Question Responses: will vary.
- Questions not requiring escalation or research will receive responses within 2 to 3 days.
- Questions that must be escalated or researched may exceed 5 days response time.”

Risk

 

  • Long term Contracts: Most Direct Merchant account relationships START with an applicant signing a contract legally committing them to an exclusive 3yr+ contract term, with an automatic yearly renewal after the 3rd anniversary.  This means that if you’re not happy with their post sale service, their approval rates or their cost (with qualified, unqualified and other hidden fees, it’s impossible to predict your actual costs) you are either stuck with them or you’ll pay a “breakup/ cancellation fee” to stop processing with them.
  • Personal Guarantees: Regardless if your company is a registered LLC, Incorporation, etc, Direct Merchant Accounts will almost always require a personal guarantee, holding you personally liable (they will sue your ass and collect via your personal assets!) for any and all shortcomings according to your contract including chargebacks, reserves, fines, minimum fees, early cancellation fees…
  • Chargebacks: Credit card transactions are refutable for 180 days from the delivery of goods. This means that the card holder can call their bank up to 6 months after a sale and dispute the charge, causing the merchant to lose the funds made from the sale AND pay a chargeback fee of $15-$40 per chargeback initiated. If you use your cash flow to grow your business, this long term liability can really impact your business.

When researching if you should outsource your online payments, consider these factors to evaluate if you should become an ecommerce payments guru and handle the Time and Risk in house or determine if an ecommerce payments company will meet your needs.

 

 

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4HWW Businesses, Cashflow and Online Payments

The book “Four Hour Work Week” by Tim Farriss has taken really taken off since I first read it a couple years ago. There’s an entire 4hww community online swept up in the movement lead by Muse creation, Outsourcing and Automation. People from all continents are leveraging technology and the internet enabling  them to proactively design their lifestyle and allowing them to have more time to explore things like traveling, working location independent and escaping their 9:00 to 5:00 cubicles to spend more time with family and do things they enjoy.

A lot of people in the 4HWW community are starting ecommerce ventures, finding a product they can sell, setting up a website and fulfillment system, outsourcing tasks like SEO and making plans to enjoy the fruits of their “hands off” systems. Like any startup, these businesses are especially cash-flow dependent for their growth. They need cash early and quickly after completed sales to purchase inventory, pay outsourcing partners, pay for website hosting and other service providers. The sooner they can reinvest their revenues on things like online marketing, the faster their businesses will grow.

4HWW businesses need to be diligent in their research when deciding on online payments providers. It’s important to calculate into their business forecasts items that will affect their cashflow:

1) How much of their annual revenue is dedicated to the total yearly costs of processing fees, including all setup, monthly and other charges.

2) Settlements are when the payment processor pays the company that sold the products; How long after a transaction is money settled to the merchant?

3) What is the settlement frequency, How often do they get paid by their processor?

4) What is the reserve amount and period? Some processors keep 5 or 10% held for 180 days.

5) Merchants need to be aware of what chargebacks are, how they can impact their business and the fees and penalties associated.

Articles warn that some 4HWW businesses that aren’t diligent in their research and follow the path of least resistance end up using someone like PayPal for starting their ecommerce ventures only to become frustrated when they have a question or require support. Even worse, there is growing frequency of reports that businesses large and small find themselves victims blindsided by changing reserve policies and unwarranted chargebacks.

 

 

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Conversions: Selling More Digital Products and Subscriptions

The customer life cycle can usually be broken down into 3 basic stages. Acquisition. Conversion. Retention. I’m going to be writing a few blog posts with advice, ideas and thoughts focusing on selling digital products and the subscriptions business model, often based on a membership or software as a service type of product.

Conversions

One of the most important aspects of a subscription business model is conversions. Simplified, the definition of a conversion is when a prospect becomes a customer. They may be visiting your website to purchase a digital product or they could be converting from a free, limited account to a being a customer of your full featured, paid product. One of the most predominant hurdles for ecommerce conversions is the process of collecting consumer payment data and processing their payment. The Holy Grail of conversions is to deliver a smooth payment process with the least amount of friction possible, while balancing the need to collect sensitive payment and contact information from the consumer to help manage risk and protect against potential fraudulent transactions.  

Here are some basic things to keep in mind when evaluating how you can increase your conversions for your products:

Consistency

When a consumer is initiating the payment process, consider the entire user experience. Hosted checkout pages are great for allowing merchants to accept payments without the time and expense of collecting credit card data on their site and meeting the requirements of PCI and security compliance. The hosted checkout page should clone the interface of your website as much as possible. Page layouts, background and element colors, branding, tag lines and logos, font type, size and colors, button graphics… Visually the process of landing on a hosted payment page should be smooth and consistent with previous pages to ensure the consumer’s confidence at their most critical and fragile moments, when they are going to provide you with some of their most guarded, sensitive information.

Convenience

Previously submitted data, like name and email address should be pre-populated on the payment form, providing the convenience of not having to re-enter this information. Displaying this information in the form communicates that this is the information being submitted for processing their payment and that the information can be easily edited and revised by the user.

No Distractions

The consumer should either be provided a simple choice and allowed to select their preferred payment method or taken directly to a one-page form to collect credit card data. The least number of pages, with the least amount of choices and forms with the least amount of required form fields to be typed creates less friction and distraction to task at hand. Often there is an advantage to offer local or alternative payment methods, but it’s important to not clutter the interface and confuse the consumer with choices that are not available in their region or they are not familiar with.

Product Description

On the page with the payment form should be a description of the product or service being purchased, details regarding future recurring payments and links to terms of use, privacy and security policies.

Feedback

Once submitted, payment form feedback should be clear and concise, displaying distinct error messages, suggesting required formatting or syntax. When the consumer clicks the button to submit their payment details they want confirmation that the data has been “accepted” by a familiar progress bar or “please wait” type message. Once payment has been processed the consumer should see a confirmation, that the transaction has been processed and they have been charged, including any details regarding future automated recurring billings. Payment support contact information should be displayed along with “Thank You” messages. An email receipt should be sent that includes all transaction information (other than full payment data) and clear subscription cancelation instructions.

Seamless

The Checkout process should be a simple, clear and consistent visual experience and on the thank you page, the consumer should be provided a link to return to continue browse the vendor website, or enjoy their purchase, filled with confidence in their purchasing experience.

When online shoppers are confronted with a checkout experience that is visually inconsistent with their shopping experience they get distracted. When they are offered too many choices, more than one form on a page or when they don’t receive feedback about errors, they get confused. When they aren’t sure about if they got charged, how to get support, what exactly they purchased or what future payments they agreed to, they lose confidence. Avoiding these common mistakes will bring you a smooth, frictionless payment process to increase your conversions and get more paying customers.

 

 

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Web Apps as Mobile Apps: A Quicker Path to MVP

Fred Wilson, a very well known and respected VC and principal of Union Square Ventures recently posted about the opportunity web apps have on mobile browsers.

 

HTML5 Mobile Apps

I saw two HTML5 apps yesterday. One running in my Android browser. The other running in the iPad browser. They looked and worked exactly like their mobile app counterparts. It was a mind opening moment.

There still are issues. When I went to show one of the HTML5 mobile apps later, my mobile data connection wasn’t there and I couldn’t load it in my Android browser. But a friend told me you could cache all the elements, including the database, on the phone and deliver an offline experience in HTML5 in the browser.

I’ve always disliked the idea that we have to download apps on our phones when the apps we use on the web are loaded in the browser on demand. But I’ve accepted the mobile app paradigm as something we will be living with for the next five years.

I’m not sure it’s five years anymore.

You can check out his post and the 87+ comments on his blog: AVC.com:

http://www.avc.com/a_vc/2010/11/html5-mobile-apps.html

 

I think more and more people are having this mind opening moment when they see how developing their apps for the browser can have such an effect on their speed to market and potential market reach with a decreasing amount of compromise on user experience and functionality when compared to a native app. In fact in most cases native apps could have so much more functionality if they didn’t need to be stripped down to run on the mobile OS.

 

Often when developing a mobile app, each platform needs to be addressed as individual threads with independent cycles and resources.  Once launched, this also has a ripple effect on marketing, distribution and support as different platforms have specific target audiences, marketplaces and support requirements. Building a web app with a user interface consistent across web, phones, tablets, and other mobile devices can open market opportunities with much less development, marketing and support overhead.

 

One key difference is how the app is marketed and distributed, for example the iTunes App Store is the only real marketplace for consumers to purchase and install iOS apps, which is great as we’ve all heard how being a featured app can create amazing success stories. But if your product becomes just another app in the growing library of the 300,000 iOS or 100,000 Android marketplaces, it becomes more and more difficult to capitalize on the advantages of these centralized captive markets and even harder to get your app noticed and purchased.

 

As Fred Wilson concluded, I don’t think it’s going to be long before startups begin to take advantage of the ability to streamline their development efforts and build their Minimum Viable Products as a web app with interfaces and functionality suitable for mobile browsers supporting such standards as HTML 5. The time, money and other resources saved by focusing their development efforts for the browser rather than diverse mobile platforms can be reinvested in marketing their product and supporting (retaining) their users. Then, when the product reaches success and native apps and functions are demanded by customers and prospects, the options for porting the app over to independent platforms can be visited. The introduction of an established, and in-demand web app into a native app store will certainly gain some attention from the target audience.

 

 

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Recurring Subscription Payment Provider Comparisons

Subscription Software Providers

Recurring subscription software providers (chargify, recurly, spreedly and cheddergetter) have APIs that support sophisticated subscription plans. If you have a complex pricing model, for example a cell phone carrier with a base monthly charge for a plan ($40 for 400 minutes and 1GB data), additional packages ($10 unlimited texting) and metered billing/ overage charges ($0.03/ min over 400 min) then these companies are great. They require you to have your own merchant account and most require a gateway also so these costs can add up if you are starting out. The sophistication of the API’s also mean significant programming is involved for integration, changes and building consumer support functionality in your app for cancelations, up/dn grades, etc.

IPSPs

Some Internet Payment Service Providers (IPSPs) like clickbank, plimus, fastspring, 2checkout support monthly recurring subscriptions. They “resell” your products so a merchant account and gateway are not needed. They provide basic subscription billing with simple copy/ paste “buy now” buttons for integration and most include affiliate networks and consumer interfaces for cancelations. As the reseller of your products, their name shows up as the descriptor on the consumers’ statement and they hold all consumer data, making it difficult to transition to a new provider or your own merchant account.

Supporting New Startups

We have built our business to support the needs of a new startup looking for the advantages of IPSPs like fast approvals, easy integrations and changes with little or no programming, consumer support interfaces and affiliate networks built in. We also support businesses as they grow, our level 1 PCi compliant gateway is included and you can start to accept payments with your own merchant account or switch to a new merchant account any time, keeping all your affiliate relationships, customized hosted payment pages, etc, without any additional integrations or consumer data security concerns.
I wrote a blog post recently with more details regarding the decision between IPSPs and Subscription Software providers, comparing costs and features.
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More Customers Will Buy Simple Subscription Plans

Simple Subscription Plans

Studies show that adding usage charges and other metered billing type pricing models can be very lucrative. This could be true for large web hosting companies and cellular phone carriers but startup businesses will most likely find that more complicated pricing will negatively effect sales conversions. When selling SaaS, the simplest plans win. Take a look at a few of the leaders in the market for example: SalesForce.com and 37 Signal’s BaseCamp. Additional add-ons, metered billing and usage/ overage charges creates a more complicated buying decision. When selling B2C or B2B, a set of pricing plans with a predictable, set monthly charge with specified included features will create an easier buying decision and result in increased sales conversions.

 

Easy Upgrades

Create a simple pricing strategy or your SaaS, Web App or Digital product and make it as easy as possible for your customers to make the purchasing decision. In most cases people will choose to “play it safe” and choose a plan that is slightly above their immediate needs. Simple subscription plans also make it easy for your customers to evaluate the decision to upgrade.

 

Retain Your Customers Longer

You will retain your customers longer with simple subscription plans because of the predictable nature of the subscription pricing. If they know what it is going to cost each month when they make the initial purchasing decision, they are less likely to reevaluate that decision.  With a variable monthly cost they will be paying attention to each monthly charge, forcing them to make the purchasing decision again each month based on the variable charges found on their credit card statements that includes all add-ons, metered billing and usage/ overage charges.

 

Boost your ARPU and CLV

If you are a startup SaaS business do you need the complexity of a subscription billing software provider with metered billing, addons, usage and overage charges that can make your customers question their purchasing decisions?  By keeping your subscription plans as simple as possible for your prospects and customers you will increase your sales conversions, increase the likelihood of upgrades and retain your customers longer- which will lead to increasing key SaaS metrics: Average Revenue Per User (ARPU) and Customer Lifetime Value (CLV).

 

Complex APIs= Increased Integration Costs

Consider complexity “overhead” when you are researching your options for selecting your subscription billing software provider. Evaluate your developer’s time and costs of integrating (and supporting) sophisticated API’s that include the complications for variable amounts each billing period and configurations for metered billing, add-ons and usage/ overage charges.

 

 

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