The power of recurring payments
Learn about the benefits of building loyalty through subscriptions.
Oiginally posted March 2021
The importance of the loyal customer can’t be understated. These devoted believers can be your biggest advocates, offering the most effective marketing your business can’t buy – singing your product’s praises to their community. Beyond their social engagement, loyal customers can be the key to building your business and your bottom line. For example, 56% of consumers are likely to spend more on a product with a brand they are loyal to, even if there are cheaper options out there. That’s why prioritizing a strategy to inspire and retain customers is no regret move.
One way to transform a prospect into a repeat customer is to offer a subscription service. One immediate benefit to the subscription model is providing new customers with a consistent service or product that build brand loyalty over time. That consistency can also help your business operations, offering predictable, recurring revenue during unpredictable times.
Does your business have a product or service that lends itself to a subscription model? DTC subscriptions have can be a viable approach for both launching and expanding your business. Research released in 2019 by the Subscription Trade Association (SUBTA) found that the ecommerce subscriptions experienced annual growth of 17.33% in the last five years and predicts most DTC brands will offer subscriptions by 2023, accounting for 18% of industry sales.
A combination of high upfront costs, the hassles of ongoing maintenance, and the frustration of technological obsolescence have resulted in product ownership losing the charm and status it once held in people’s lives… they increasingly favor outcomes and unique experiences — a ride, a place to stay, the latest handbag to accessorize with. Why buy and own something if there is an easier way to get the same or an even better outcome? In other words, “Why own when you can subscribe to a service?” This is the new mindset amongst consumers.
In fact, their most recent the 2020 edition of their Subscription Economy Index™ (SEI) report finds that subscription companies subscription sign-ups continued to rise, with subscription businesses expanding at a rate of 12%, while S&P 500 companies saw sales contract at an annualized rate of -10% in Q2.
As stay-at-home orders remain prevalent in the COVID-era, offering some sort of recurring payment option is a way to provide an added level convenience for customers who want to set it and forget it without having to worry about making a trip or reordering.
By enabling recurring payments through Amazon Pay, you can make it easy for hundreds of millions of Amazon customers to start a subscription, pay a recurring bill, or make a future purchase (for example, purchases of mp3 songs or games) on your site. Amazon Pay lets merchant automatically charge a payment method that is stored in their customers Amazon.com account for future purchases and payments.
To learn a little more about how recurring payments work with Amazon Pay, check out our Recurring Payments FAQ.