This year’s Business Show featured presentations and panel discussions with experts from across the industry. We’ve collated our highlights for those who missed the event.
How to double your business value: moving to a recurring revenue model
Rachel Astall, Head of Partnerships at Go Cardless, reveals the benefits of introducing a new way of pricing and delivering goods and services to your customers and how to spot successful recurring billing opportunities to power your business, make investors happy and bring owners peace of mind.
A recurring billing model, like the one you may have with the gym, is one in which the customer will expect to be billed more than once, and in return will receive something of value from you over a period of time.
Rachel says Go Cardless is seeing more businesses in a wide variety of industries, from sole traders to major enterprises, consider this route to take the pain and stress out of managing the peaks and troughs of cash flow. Increasingly, customers are also demanding new and more flexible consumption models.
“Businesses with recurring revenue models rarely miss their sales targets by more than around 10%. Typically, they don’t have the problems with cash flow as businesses which focus on one-time transactions,” Rachel says. Almost 50% of businesses in the UK are cashflow negative.
“Recurring revenue is more predictable, more controllable, scalable and you can have better visibility of what’s going on in your business,” she adds.
How can I apply a recurring revenue model to my business?
If you already have an ongoing relationship with your customers, whether you sell everyday items like bread or tax returns, or whether your customers could come back to you multiple times to make a purchase, then you already have the foundations in place. If not, ask yourself these three questions:
- Is there anything your customers would want on repeat?
- Could you introduce a value-adding premium service on top of your core business similar to Amazon Prime or Deliveroo Plus?
- Could you package up your services in a way that would be attractive to customers
Always make sure the customer experience is great
The value and mechanics of a recurring payment model must be clear and appealing for a customer to adopt or it will not be a success. Rachel strongly suggests building in flexibility to reflect changing customer needs over time. “That might mean giving customers the opportunity to upgrade or downgrade or change their services, and even make the cancellation process straightforward,” Rachel says.
“The payment process should be integrated seamlessly with your other systems, including CRM, finance and communication and use these to create a great customer experience, improve retention and build loyalty.”
- Businesses across industries are moving toward subscription or repeat services to smooth out revenue peaks and troughs
- The loyalty of the customer is central to the success of this new model and companies must integrate internal processes to effectively manage this complex relationship