Subscription businesses benefit from having the flexibility to create different plans and pricing structures to meet market needs. Subscription businesses also need the flexibility to offer billing intervals that may differ from the plan length.
For example, perhaps your business offers both monthly and annual plans, and the latter offers a discounted price in exchange for a 12-month commitment. Many subscribers prefer the annual plan but want to spread the payments out by paying monthly or quarterly.
Recurly now allows billing periods to be set independently of plan length through our new Subscription Billing Terms feature. By decoupling these two components, you can create plans that have a single billing term but multiple billing periods, such as an annual subscription plan that is billed quarterly.
Having this flexibility provides a number of benefits:
Improve subscriber acquisition
In B2B selling scenarios, it is common to negotiate pricing separately from billing terms. For example, a sales representative for a B2B SaaS business offers a prospect a discount if they sign up for a two-year commitment to their Enterprise Plan instead of a one-year commitment to their Professional Plan. With Subscription Billing Terms, the sales rep can offer a further ‘sweetener’ to the deal by offering quarterly payment terms rather than a single upfront payment.
When the plan renews, the rep also has the flexibility to change the length of the renewal term to be one year rather than two.
Provide incentives for longer-term plan commitments
An over-the-top digital streaming service wants to offer an incentive to acquire new subscribers for their six-month plans. They offer their premium movie channel at a discount when subscribers commit to the service for six months. The subscribers will enjoy the convenience of budget-friendly monthly bills, and the streaming service gains subscribers for their six-month plan.
Provide installment plans
A SaaS business offers professional services to customize integrations with their system. As a courtesy, the business allows new customers to pay the professional services fee in installments over the course of a set number of months, rather than having to pay the entire fee at once. The total cost is $5,000, and the business creates a billing plan that charges the customer $500 each month for 10 months, using Subscription Billing Terms.
Some additional benefits provided by this feature include:
Enforce cancellation terms
If you are creating a subscription with multiple billing periods within the plan term, you’ll be able to enforce stricter cancellation rules based on the plan length specified at sign up. With Subscription Billing Terms, you’ll be able to continue to bill for the remainder of the plan term, even if the subscriber cancels their subscription.
Gain more meaningful insights
The Subscription Billing Terms feature more precisely reflects the subscriber lifecycle and provides insights that include:
How far subscribers are in their subscription term
How much money has yet to be billed
When the term started or ended
If the term is configured to renew
Which subscriptions are expiring after the current term
Flexibility to meet different needs
This graphic provides some examples of the different plan lengths and billing terms you could create using Recurly’s Subscription Billing Terms.
Subscription Billing Terms will be included on all new Recurly sites created after July 26, 2018. For more information, visit our documentation page.