Five Things You Need to Know When Transitioning to Reoccuring Model 

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Transitioning to a Recurring Business Model? Here are 5 Things You Need to Know.

Written by: Marielle Mekkaoui

Subscription business models are a win-win largely because they provide the balance of value between the company and the customer. Consumers love subscriptions because they offer a better product experience (ease of use), enable costs to be amortized, and provide a guarantee that vendors will continue to earn their business. Businesses love subscriptions because they offer predictable revenue streams, the ability to manage inventory, and the potential to collect vast reams of data, giving them increased insight into consumer trends and preferences.


If you think your business model is immune to this trend think again; more and more ‘analog’ businesses are transitioning to these recurring business models. Though not built overnight, there are a few things to keep in mind when transitioning either in whole or in part to a recurring revenue model.




1)   Understand the different business models

Is your product a pure subscription model, a pay per usage or some hybrid?  Should you offer this monthly, annually or both? How will this affect your current product offering (if applicable)?


2)   Consider a Freemium Model

SaaS and recurring models are all about continuing to demonstrate value so go ahead and give them a free taste. Make sure, however, to clearly differentiate between the free and paid versions, provide an easy mechanism to upgrade and regularly track conversions.


3)   Pricing: Keep it Simple

Do not offer too many pricing options. Consumers are turned off when they have to compare too many pricing proposals and often walk away. When in doubt 3 is a good number.


4)   Select a payments partner who knows subscriptions in and out

Rather than reinventing the wheel, the most successful recurring businesses know they need a partner with this core competency, offering flexible solutions that account for:

  • Coupons & Offers – create and manage compelling bundles.
  • Ease in switching, upgrading, cancellation and updating payment details.
  • Dunning management (auto retry of failed cards) and account updater services (pre-check for expired cards).
  • Ability to manage inventory (if physical product).
  • Intelligence – your partner should offer actionable payment analysis on transaction acceptance/ decline data in order to optimize payment conversion. Yes – this is a thing!


5.) A/B test, analyze, iterate and grow your business!


Subscription models can do wonders for your business, and keep customers coming back for more. With a little extra planning, you can take your subscription business to a whole new level.


Interested in optimizing your subscriptions further? Check out our Express Train to Subscription Optimization for some next-step tips on how to keep your subscription engine chugging.

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