Many subscription-based companies utilise recurring billing system to help manage recurring invoices and payments. Gyms and fitness studios, subscription gift boxes, and streaming services are a few businesses employing recurring billing software.
Understanding Hybrid Billing Structure
Subscription management software is fast gaining popularity in the modern business world. However, recurring billing solutions enlist the use of various pricing strategies that are adapted according to the business type. For instance, a magazine-selling business may employ a flat fee pricing model whereas a saas based company may opt to go for a tiered pricing structure.
However, if we consider the example of an educational institute then they have students with diverse types of fee-paying needs. One student may want to go for a yearly fee structure while the other might be more comfortable paying in instalments. There are different structures within instalment payments as well. Such as two instalments in a year make it a bi-annual payment structure whereas instalments divided down into 4 quarters make it a quarterly payment structure.
Keeping these points in mind, a hybrid billing model is a solution far more suitable to your customer’s individual needs. But what exactly is a hybrid billing model? Well, hybrid billing is a convenient mix of usage-based and flat-fee pricing models.
Such lucrative advantages have made it a preferred billing system. Following are some other reasons why hybrid billing is going to be a popular choice in 2023 as well:
Empowering Your Customer By Providing Tailored Payment Solutions
One of the reasons many recurring billing businesses are shifting to hybrid pricing, which incorporates recurring billing options with one-time purchases, is to provide customers with more options.
Hybrid pricing allows companies the chance to set themselves apart from other subscription-based service providers while providing customers with a service that is customised to their specific requirements.
Flexibility Within Pricing Structures
Businesses have more pricing options with a hybrid approach. It is a means of getting around the drawbacks of the subscription model pricing scheme. As a firm, you’re no longer under any need to group all of your goods and services into tidy packages that must be priced to account for the possibility that buyers will only require or desire some of the features. You can design a pricing structure that reflects real value because customers can add on as they see fit.
Improved Customer Relations
Since the customers get various pricing options available as per their needs, it leaves a good impression on their minds. Moreover, the best recurring billing platforms understand how essential it is to maintain good customer relationships in order to survive in the cutthroat competition of today’s world. That’s why they opt to go for hybrid pricing to make sure that customers are pleased with the services, there is less room for errors and fewer reasons for the customer to back out.
Diversifying Your Revenue Streams
Choosing to go with the hybrid pricing strategy is a smart way to diversify your revenue streams. Since you are able to get customers that want your basic services or product as well as the ones that want to go for additional features or premium versions. This method also allows space for scalability and for your business to experiment with various features or versions to see which ones are popular among your customers.
Increases Customer Retention
Recurring Billing businesses for Small Businesses can benefit greatly from a hybrid billing model since they will be able to retain their customers for a longer period of time. If you choose to go with a certain type of billing model, for instance, a flat fee then there may be features in your product that the customer does not require and may not wish to pay for. By allowing customers to choose the sort of pricing model they want to go with, you improve customer retention rates.
Endless Possibilities With Hybrid Billing Model In 2023
A versatile subscription management and recurring billing system are necessary to make the switch from one type of billing method to a hybrid billing model that combines one-time payments, usage-based pricing, subscriptions, and other variations. In order to support and complement their wide range of services, vendors require a robust billing system that is capable of handling all of these activities. With several options available in the market, you are in luck to choose the one that is best suited to your needs.