Is annual or monthly billing better for subscription-based memberships?

Is annual or monthly billing better for subscription-based memberships

Offering a members subscription service has fast become a popular way for all types of businesses to guarantee their income and a cost-saving, simple option for consumers. 

Providing your visitors with membership or an annual pass scheme helps to build your brand as well as customer loyalty and therefore, repeat visitors and the associated Spend Per Head (SPH) that comes with increased footfall. 

A growing number of visitor attractions are reaping the benefits of providing a fully integrated EPOS and Membership system with additional Software as a Service (SaaS) functionality to meet specific requirements. For example, automated Direct debit processing built into the membership system allows the business to streamline operations and offer greater efficiencies, improving the customer experience. 

Ultimately, recurring billing can be a lifeline for any attraction or leisure business with a membership model. It’s simple, convenient, and extremely sustainable. 

What is recurring billing? 

Recurring billing is where you charge your customer a set amount of money at the same time every month or year. Charging the customer until permission is withdrawn, or they cancel their subscription. 

Subscriptions can include gym memberships, subscription to internet services, monthly phone bills, etc. 

Using cloud-based subscription services, in particular, can help you to effectively manage your customers, delivery partners, and all parts of your supply chain. SaaS in the cloud also means updates are carried out automatically, and you don’t require a huge IT infrastructure to manage your systems, especially when operating across multiple locations. 

However, to understand which subscription term is right for you, annual or monthly, you must first understand how SaaS will be used. 

EPOS systems that offer you… 

Dynamic pricing – helping you to manage demand and supply much easier you can now reduce the volume of wastage, and therefore improve profit margins. You can also change prices at short notice and replace manual spreadsheets saving you considerable time and allowing you to identify buying patterns and manage communications. 

ERP (Enterprise Resource Planning) – supporting the entire operation process, you can use these systems to manage your accounts, support you with project management, supply chain operations, and so much more. ERP uses the data it receives to ensure high-quality standards are met, boosting efficiency without compromising quality. 

To find out more about this area, make sure to check out our latest blog post HERE. 

Monitoring of quality and safety testing – the hospitality industry has various health and safety and food safety standards and regulations that they must follow. With the right SaaS system, businesses can now check on safety standards throughout the entire supply chain, from sanitisation of equipment to correct storage procedures, etc. 

EPOS systems: SaaS software can be operated on standard windows 10 devices, allowing you to process transactions, take payments as well as handling table service and Click and collect orders. Systems must meet your business needs, so it’s essential to choose wisely. 

Complete visibility – EPOS software should be mobile friendly with a full version being compatible on both tablets, smartphones, and desktops. This means you aren’t restricted to just one location, allowing you to operate Mobile EPOS in the pop up locations anywhere at any time. 

Scalable – using cloud-based software means you can scale the system to your business’s growth strategy; you don’t have to change your hardware or require full, costly IT services. 

Value-based pricing is key 

You need to manage your pricing to maximise your revenue, which is why setting the right price can impact your bottom line, improve acquisition opportunities, and impact your customer retention. 

Consider what the true value your customers are willing to pay for the service you provide.  

Recurring billing 

If you’re thinking about annual or monthly billing for your subscription services, it’s important to know the advantages and disadvantages of each. 

Monthly billing 

Advantages 

  • Monthly can provide you with an improved cash flow option 
  • It can be more flexible 
  • Easier to cancel at any point 
  • Customers often prefer to pay in smaller instalments 
  • It eliminates a lot of the admin tasks and work that goes with making a sale 
  • Choose if there is a minimum term of contract or not 

Disadvantages 

  • Monthly often costs a little more in the long run compared to annual 
  • Monthly payments can take a little more processing, even with integrated Direct Debit functionality. 

Annual billing 

Advantages 

  • It works out to be cheaper than monthly payments 
  • Once it is paid, you have complete peace of mind that everything is taken care of 
  • You don’t have monthly service fees 

Disadvantages 

  • If you have a visitor cancels a subscription partway through,  
  • You might not notice any errors in bill payments for a while. 

Overall, research has proven that annual billing is more successful than monthly billing as it ensures a much higher rate of customer retention. 

The right EPOS system for you 

With subscription services, you need to ensure that you have the right tools and tracking processes to track billing cycles effectively, especially if you have people paying different amounts at different times. 

This is where integrated subscription management tools can help. 

Improving both front and back-end operations and providing you with valuable business insights 

At Haven Systems, we have various EPOS solutions that are flexible, affordable, and convenient.  

Whether you’re looking for new systems, an upgrade on a current system, or you would like a no cost demo system, call us on 01646 601 992 and see how we can help you today.