Re: One time vs. Recurring Billing

From: David Hauslaib <dave_at_bmedia.org>
Date: Thu 02 May 2002 11:06:59 -0600

Thomas

You're right, subscriptions are gaining momentum. What isn't as easily
answered are your questions about them because the solution you are after
is pretty relative; what works for you may vary greatly from what works for
another person.

The two questions you asked are directly connected.

Many customers find that dealing with recurring charges to their credit
card as annoying and cumbersome, so many prefer a one-time charge that they
pay once and do not have to worry about until their subscription
expires. However, if the one-time charge is a large amount, it may be more
appropriate to break it into several smaller charges that occur over time
so your customer is not overwhelmed with a significant price for your
service. Or better yet, provide your customer with the option.

This ties in with how often you should bill your customer. Look at the
time table of your subscription service. Is it a service that is updated
every day, every week, every year? This is definitely a factor in how long
your billing cycle should be and how often you will require subscribers to
re-subscribe to your service.

The one question that you should be glad you are asking yourself is how all
of this will reflect on your business practices. No matter what option you
choose in order to bill your customers, keep two things in mind: customers
respond best to options (but a select few, rather than a vast array) and a
clear, concise explanation of how you will bill them.

Do not expect your customers to automatically assume that you will bill
them when their subscription expires to renew their account -- and on the
same note, do not assume they will think you will NOT bill then when it
expires. Whatever you choose, make sure the customer is fully aware of
what they are buying before they click the "Purchase" button. If you are
looking to maintain a reputable subscription service, then don't try and
fool your customers with fine print. Put your billing terms in front of
them in an easily accessible manner. They'll thank you for making your
service easy to subscribe to and remaining honest about how much and how
often you charge them.

Best of luck!
Dave

_____________________________________________

David Hauslaib

Founder, BMEdia
Information Capitalist / Web Guru
http://www.bmedia.org / dave@bmedia.org
Mobile 860.655.7495 / Fax 360.397.2906





Received on Thu May 02 2002 - 12:06:59 CDT