Before we begin to understand why subscription and recurring payments are essential for any eCommerce business, let’s understand the hows and whats of these concepts.
For any eCommerce business, one of the major issues is the customer churn rate. It is nothing but the number of customers who have bought the product or service but failed to become repeat customers.
Being an eCommerce business owner, you would want to have repeat customers, and an effective way to solve this issue is by luring them to opt subscription-based model. Subscription commerce is a great way to earn recurring revenue, and product subscriptions can help with a recurring revenue stream. If your Magento eCommerce store utilizes any subscription extension, the functionality will aid in overall business growth, a loyal customer base, and a great customer experience.
By 2025 the global eCommerce subscription market will be worth $246.6 billion, suggests UnivDatos Market Insights in one of their press releases on PR Newswire.
So the right time to leverage subscription commerce is now, and if you need reasons, here are the top 7 reasons for your eCommerce store to offer subscription and recurring payments.
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Easy and Convenient
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Product Discovery
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Higher Customer Retention
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Greater Business Predictability
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Reduces Cost
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Any Product Can Become a Subscription Service
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The Future is Subscription-Based Business Models!
Let’s delve into one by one to gain the deeper inside.
Easy and Convenient
Unlike the older times, your customers want to make their lives easier with minimal effort when it comes to buying something. Your eCommerce store with Magento 2 subscription extension can make it possible. Allow your customers to subscribe to one or more products at once to eliminate the process of adding the same to the cart and checking out as and when they need it. It can work both ways – your customers subscribe for longer durations, and you get recurring payments generating a steady revenue stream. More convenience is associated with subscriptions as it leads to discounted prices on subscriptions, access to offers for subscribers, timely product delivery, and much more. On the other hand, merchants can earn a loyal customer base, predict yearly/quarterly sales, plan marketing and supply chain arrangements in advance, and many more.
Product Discovery
The best part about having a Magento 2 subscription extension in place is that these can offer you a wide array of features to enhance your product discovery. Think of this as a chance to showcase your product to potential customers every time they land on your eCommerce store. When they subscribe to your other products, you can always include suggestions right below to plant the idea of your new or existing products. These are the stages in the customer journey wherein a customer can pay attention to the details of that product and make the purchase. Subscription business models help with upselling and cross-selling that eventually lift up product discovery for eCommerce merchants.
Higher Customer Retention
With a Magento 2 subscription extension, you can experience fortified customer influx in two ways! A. Upsell and Cross-sell concepts B. Introductory Experience.
If customers have subscribed to your product X, they are more likely to purchase product Y, which is adjacent to product X. For example, offering or suggesting a lens cleanser after the customer has purchased a pair of lenses from your eCommerce store. Moreover, you can offer a subscription for new lens’ purchases after every week, month, or year if they have repetitive usage based on their purchase pattern. Such upselling and cross-selling techniques can yield a higher customer retention rate.
Similarly, if you give a free trial of a feature-rich product, or say, a free subscription for a week or month – your customers will be able to acquaint themselves better with the product to make a decision. In fact. Forbes states that the average person tells 16.5 other people about a product they like. In return, they will continue using your product, pay for the premium features, and suggest it to people around them. And the loop of recurring payment kickstarts from here! Just like this, a Magento subscription module can offer a high customer retention rate in multiple ways.
Greater Business Predictability
The Magento 2 subscription extensions help you on bigger levels, such as a clear vision and business predictability. Knowing the number of subscribers on your eCommerce store facilitates cash flow management, inventory management, investment, and payroll flexibility. If there is consistency in the revenue stream, it becomes easier for eCommerce businesses to predict their upcoming numbers and forecast their inventory well in advance too.
Reduces Cost
With the use of the Magento 2 subscription extension, you drastically reduce customer acquisition and management costs. How so? Once you have a customer who has already signed up for the subscription, you don’t have to chase them for a repeat purchase as they are already on board. This way, you can forecast your future numbers based on the existing customers and work on your marketing strategies accordingly for the new customers. When it comes to marketing costs, you already have comprehensive data about your customers that can include their interests, preferred products, their choices, and the frequency of buying a product, along with their basic information like age, sex, occupation, etc. With such a piece of refined information, you can carve out a stellar marketing strategy backed up with powerful SEO practices to reach out to the target audience and save your marketing costs.
Any Product Can Become a Subscription Service
Literally, anything can become a subscription service – whether it is food, a service, a product, and even an experience! You may already have seen the internet is flooded with subscriptions to various things such as yoga classes, dance tutorials, monthly groceries, live streaming platforms, music applications, and the list goes on.
As an eCommerce store owner, adding a Magento 2 Subscription Extension allows you to offer various products and services to your customers efficiently and effortlessly. Moreover, this helps you offer a personalized experience to your customers, which becomes an added benefit to your business!
The Future is Subscription-Based Business Models!
As per Chargebee, subscription eCommerce sales increased by 41% during the pandemic and accounted for 3% of US retail eCommerce sales in 2021, totaling $27.67 billion, an increase of more than $10 billion from just three years ago.
It all sums back to making your customers’ lives convenient and hassle-free while building a recurring revenue stream for your business. You can literally offer any product on your eCommerce store via Magento 2 subscription extensions. In the fast-paced world, everything is becoming digital, and your customers want to save time. By implementing a recurring payment model or subscription-based business model, you are only preparing your eCommerce business to thrive in the future.
Conclusion:
MageDelight’s Magento 2 Advance Subscription and Recurring Payments Extension is made for eCommerce merchants who wish to implement the subscription business model and make the most out of the recurring payments it yields. Moreover, it is all about saving extra costs of acquiring new customers and working effectively in retaining the existing ones. It supports all kinds of major payment gateways while also offering a dashboard view to the admin.
About MageDelight:
MageDelight, we continually strive to offer real-time and efficient eCommerce solutions to help our clients thrive in the industry with our bespoke Magento 2 extensions. Make your eCommerce store future-proof, acquire new customers, and transform it into a profitable business with our eCommerce solutions. Learn more about our solutions here and get in touch with our experts to understand how you can implement Magento 2 subscription extension in your store and improve your business.
Also, you can refer this Advanced Subscriptions & Recurring Payments Extension FAQ Page for most common question and it’s answers.
If you need our professional assistance, feel free to contact us anytime.
