Advantages of a Subscription Billing Service

You probably can’t even keep track of how many subscriptions you pay for every month or every year.

Believe it or not, 84% of people don’t even know how much they spend on subscriptions.

There’s clearly a lot of money involved in this scheme, and maybe you run a business that could benefit from a subscription billing service. Let’s find out.

What is a Subscription Billing Service?

A subscription billing service is a popular business model that involves one steady payment that recurs over a certain period.

Consumers will pay a regular fee for regular or unlimited services that will amount to less money at a time. Like renting a home instead of buying it.

You may be wondering: “Who really wants to rent something?”

Well, paying small amounts at a time can seem less daunting than making one large payment, but you’re not crazy for thinking that. Let’s go over some of the reasons why this model works so well.


The benefits seem to be endless for adding this to your business model. While subscription billing services have many benefits for both the company and the consumer, let’s talk about the key points.


Consumers benefit dramatically from this type of service. Put yourself in their shoes for a moment.

If you hear that you can get an all-access pass to something you want for $10 a month, you would be a lot more likely to subscribe than if you were told to pay $1,560 for a 3-year pass. However, the money is the same.

Also, when the recurring payment is small enough, the consumer is less likely to end a subscription when they are not using it.

It’s such an appealing method that the average adult of any age will have 2 active subscriptions at any given time.

This is the reason that platforms like Netflix are able to sustain their business and make a profit. Over the course of a 3-year period, they would still be collecting the same amount over time.


For the company, this model is becoming the gold standard for many reasons. Not only is it easier to sell your product to consumers, but you will maintain a steady, predictable cash flow from which you can set your company’s budget.

With recurring payments from subscriptions, you will be able to take in money every month at a consistent rate, and receive more money from the average person than you would in a month-by-month payment.

Most people don’t notice small amounts of their money being taken from their bank every month, and they are less likely to go out of their way to cancel a subscription than they would be if they had to renew it every month.


The middle ground in this industry for the consumer and the business is setting a price. This is the most difficult point at the beginning, and you will have to toe the line on this.

The price must be low enough that it is appealing to the consumer, while also being sustainable for the business. However, you do have to weigh out a few factors here.


Gyms make the best examples here. Gym memberships are recurring monthly payments, like a subscription. However, the company will lose money if everybody is using the service all the time.

A car wash or a gym membership can afford low prices for subscriptions if they are sure that their members will not use their resources every single day. Overcrowding will drive people away and cost the company a lot more money.

If you are providing an online service that does not cost more for higher usage, than the price may not have to be increased. However, if the usage of the subscription will cost the company money, the price may need to be higher.


If your price is too low or too high, you will not be able to sustain that model. If there is labor involved in the subscription, such as a subscription for unlimited lawn mowing services, then there will be clients where money will be lost.

This is totally fine. If enough subscribers are not utilizing the service, then profits will be made.

Not only that but maintaining the value of the subscription to the customer is just as important. For example, you may have seen memes or heard jokes about people canceling their HBO subscriptions after the Game of Thrones finale. This was not a surprise to the company, as this was their most popular program. This is known as churn in the business.

Keeping members’ interest and keeping up with the time will keep your subscription business running optimally.

Set a price that you think will entice consumers, then adjust as needed.

Amazon was able to raise its Prime subscription costs by $20 a year because they knew how valuable the deal was to their base. It was a minor-enough adjustment to keep the majority of their subscribers, so don’t set yourself up for dramatic change in the future, as this will alienate your customers.

Offer Degrees

This means that if you are offering a subscription, offer different levels of the same product or service.

You can charge more for better access, and have your smallest fee for a base subscription. An auto detailing service could likely afford to charge $15 a month for a basic vacuuming and sanitizing service. However, they would need to charge more for a full internal and external deep cleaning.

A luxury car service would jump on the opportunity to pay $60 a month for a “platinum subscription” for unlimited interior cleaning services, seat shampooing, and polishing of the exterior.

People may want to pay the minimum for a basic service or pay more to get more. So try to offer a variety if possible.

What Else?

If you think your company could benefit from a subscription billing service, then you might want to stop missing out on the fun.

If you’re ready to make the jump, then check out our advanced billing options and get started today!