The beauty of a subscription business model lies in the way it turns a single payment into many payments. Subscription renewals expand revenue streams and signify brand loyalty. But as customers approach renewal dates, software vendors should view this time as an opportunity to reaffirm the value of their product or service.
Which leads us to the dunning process. Let’s begin with definitions: The dunning process consists of identifying subscriptions that have already expired or are on the verge of expiring and sending the owner of the expiring account a notification with the goal of collecting payment.
This post focuses on the second step, sending a dunning notification, and how to do it properly in the digital age. Simply put, whether you are dealing with an online service, a SaaS product or traditional on-premise software, if you want customers to renew their subscriptions, you better inform them of what they’re missing if they don’t renew. Read the rest of this entry »
Filed under Ancestry.com, Carbonite, Dunning Process, subscription business model
While traditional models of selling games online is alive and well with veterans of the B2C sector, we have also witnessed the rise of alternative, social approaches to online marketing strategies.
In this post, we take a look at the online video game industry and analyze two different marketing strategies utilized by B2C companies. Our goal is to see how these different strategies can be applied to other e-commerce verticals.
When I think about the major social video game companies producing massively multiplayer online (MMO) games, I think about Electronic Arts, Activsion Blizzard, and wunderkind Zynga. These are the corporations structuring our play on the Internet.
It goes without saying (but I’ll say it anyway), that the way we play and pay for video games today is different than it was 25 years ago. Back then, I had an Atari 7800 with 4KB of RAM. I could buy a cartridge of Joust from Toys “R” Us, put the game in the console and I was ready to be interactively entertained. Read the rest of this entry »
Filed under conversion optimization, Customer Engagement, Landing Pages, SaaS payment models, zynga ea ecommerce
Digital product e-commerce is a special breed of e-commerce because of the expectation of instantaneous product delivery. Because the product is digital, today’s buyers rightfully expect to receive it immediately upon completion of the purchasing process.
However, many customers prefer to pay for products via payment methods that require an offline step, such as Konbini, Boleto Bancario, wire transfers and even PayPal. Don’t lose sales because you aren’t aware of these offline payment methods, which require special handling in your e-commerce system.
With offline payments, a customer places an order for a product online, but completes the payment at a later time and through a different interface. For example, the Japanese Konbini payment method requires the customer to print out a transaction receipt, take it to the local convenience store and pay the cashier for the product.
The Konbini system notifies the merchant that a successful payment has arrived, and only then is the order fulfilled. This entire process can be completed in as little as 15 minutes, or take days or even weeks, depending on the obstacles presented to the customer from the time that the order is placed until the payment is made. The graphic below describes the different steps required to complete an offline payment.
Offline Payment in a Typical Order Process
In real life, any time an offline payment order is submitted, there will be a significant percentage of orders that are never paid. This is a fact of life because some buyers experience remorse after placing the order, realize they have insufficient funds or have an honest memory loss about the order. The hard truth is that the majority of these orders will remain unpaid.
However, there are ways to recapture some of these “lost” orders, and more importantly there are huge advantages to offering offline payment methods like Konbini, Boleto Bancario, wire transfers and PayPal.
ADVANTAGES OF OFFLINE PAYMENT METHODS
Unlike credit cards, where a customer can simply call their bank and rescind the payment through the chargeback process, when money arrives for an offline payment, there’s often no opportunity to automatically rescind the payment. Rather than having to keep a reserve of money for up to six months to cover credit card chargebacks, money received by offline payment can typically be used immediately.
Another advantage for offline payments is that there’s frequently less private information stored to attract hackers. In the case of PayPal, the only personal information stored is a customer’s e-mail address, which is captured during the order process any way.
PayPal’s website is an attractive target in this case. But even though fraud caused by stolen account credentials can be a problem with PayPal, you usually know about any fraudulent orders within two to three days because e-mails are sent to the account holder following any payment activity.
DISADVANTAGES OF OFFLINE PAYMENT METHODS
It’s extremely important to ensure proper processes are in place to prevent products from being delivered to the customer before the payment is cleared. If your process functions like a credit card transaction, where the order submission triggers delivery of the product, lost sales will result because customers receive the product before payment is made. The graphic below shows the proper location for your fraud screening capabilities in the order process.
Fraud Position in the Order Process
Costs for offline payment methods vary widely– from virtually free (when automation is possible) to 25%+ of the transaction amount! However, even if the cost is significant, any additional sales will most likely offset these costs because, as pointed out in a recent post, customers are more likely to purchase when they have their preferred payment methods and currencies available.
Keystone: Offline payments may be more complex to support than credit cards, but you should consider the advantages of offline payments when deciding whether or not to support them.
Do you have any fears about supporting offline payments from other countries? Which countries are the most frequent users of offline payments?
Filed under boleto bancario, konbini, offline payments, wire transfers
