If you are a savvy entrepreneur, you probably already use a virtual terminal to capture telephone and mail orders. No doubt, you also have a dynamic loyalty program that keeps people coming back and encourages them to invite their friends and family to join in on the fun. But have you ever considered how instituting the option of recurring billing can help your operations to expand and become even more attractive?

What is recurring billing?

The name pretty much says it all. Instead of restricting customers to taking care of their entire bill in one payment, recurring billing gives you a way to distribute the charges over a set period.

Once you configure your point of sale system with your payment services provider, you’re ready to set up recurring billing with each customer according to their individual preferences. In general, however, you determine how much money will be withdrawn from their bank account or credit card on a monthly basis, specifying the specific amounts, dates, and duration. Once you and the buyer have done this preliminary work, the system virtually runs itself.

The advantages of recurring billing.

While the process of launching and maintaining recurring billing is an easy one for most merchants, you might still be wondering if it makes sense to dedicate your energy into making it happen for your company. Before you decide that you’re too busy to be bothered, consider the many upsides to recurring billing.

• Increases customer satisfaction. Now more than ever, people want to be given choices not only in the products available to them but also in when and how they settle their bill. In addition to taking various methods of payment, offering recurring billing provides your valued buyers with the flexibility and choice that they may not be able to find with your competitors. The result of their satisfaction will turn out to be increased sales and referrals for your store.
• Brings about more predictable cash flow. Once you have made arrangements with your customers to have their fixed payments withdrawn on a regular basis and transferred into your business account, you will know exactly how much money you will be receiving from each person. The mere fact that you don’t need to chase after delinquent bills and can make purchases knowing that you will have the cash to back them up should be reason enough to encourage you to offer recurring billing.
• Allows you to deepen your relationship with your customers. When people are submitting regular payments to you, your store is always at the top of their mind, particularly if you take action to keep them interested and engaged. Of course, you can email payment reminders and receipts, but you also have the golden opportunity to furnish customers with promotions, information about new product launches and even incentives to add accessories to items you know they have already bought. Far more than just a dry, transactional dialogue, you now have the power to bring your paying customers into your family and onto your team, in the know about the inner workings of your store.
• Cuts down on cost and effort. Manual invoicing and payment processing require time and work on the part of you and your staff. However, this is minimized drastically when you set up recurring billing since your point of sale software will take on the load of notifications and confirmations. Your input will only be necessary when you need to make changes to the payment amount, the withdrawal schedule or the account that is being charged.
• Enhances security and defends against fraud. When customers provide you with their payment information, it is stored in your gateway software’s secure servers. These providers are committed to protecting data and do so by following best practices such as the Payment Card Industry Data Security Standard (PCI DSS) as well as instituting protocols such as encryption and tokenization. Thanks to these safeguards, customer information is kept as safe as possible, and your business’s credibility is heightened.

In short, recurring billing provides a bounty of benefits for both merchants and their customers. Putting this system in place enhances relationships, furnishes flexibility and choice, adds more predictability, and helps to cement that all-important give-and-take between buyer and seller.

Making recurring billing work optimally for your business.

Now that you’re convinced that recurring billing brings numerous upsides to businesses of all types, you are probably asking what you can do to make the most out of your subscription/recurring billing program. The following tips can help you to elevate a mediocre setup into one that will make customers happy and even send your sales to the next level.

• Make prepay billing standard. This strategy works best for subscription-based business types. Unless a customer specifically requests to pay ahead in a lump sum, operate under the assumption that everyone will use recurring billing for their ongoing payments.
• Make signing up simple. If something takes too much time or is difficult, you will lose many potential recurring billing customers. Work to make the initialization process fast and easy, and don’t forget to train your staff on how to answer any questions or concerns that may arise during sign-up.
• Give incentives. Convincing people to start recurring billing is even easier if you provide tangible advantages. Some businesses offer a small discount in the price of the item or subscription being bought. If that isn’t realistic for your store, consider giving away discount coupons, promotional items, or chances to win in a monthly drawing. The key is to get over the initial hump; once the person has agreed to the regular payments, you can expect that things will flow smoothly.
• Keep the lines of communication clear and open. The reason you are entering into this ongoing type of transaction with your customer is to make things easier for everyone involved. For you, that means making it a point to alert customers to all aspects of your billing scheme. In other words, there should be no ambiguity at all when it comes to how much is being withdrawn, from where and on what date. Additionally, regularly send invoices with friendly payment reminders as well as notes to confirm a received payment. Furthermore, you should have dunning software in place that lets you know when the buyer’s credit card is due to expire so that you can take appropriate action well in advance to prevent interruptions

When you institute a stellar recurring billing program that puts the customer at the center, you can look forward to long-lasting loyalty and a relationship that goes far beyond the merely transactional.

The subscription/recurring billing trend has skyrocketed in popularity because it is highly effective. Customers get their products and services on time without needing to remember to pay their bill. Merchants can look forward to continuous, predictable cash flow and less drudgery when it comes to manual invoicing. Best of all, data security is a top advantage for all parties. If you haven’t already incorporated this option into your point of sale system, set up recurring billing with your payment processing company today.