The Simplest Billing Frequency Benefits Customers

1. The Simplest Billing Frequency Benefits Customers © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential. 1

2. The Simplest Billing Frequency Benefits Customers Acquiring and retaining customers is the primary focus of any business or service provider, especially those using a subscription billing model. More customers allows these companies to offer their products at attractive prices, which retains those same consumers and draws in even more. While determining the most effective price requires a lot of data and calculations, consumers mainly want one thing: simplicity. A report by the Harvard Business Review found the ability to keep things simple was the biggest determining factor of what the publication called stickiness – that is, how likely a customer was to buy a product, recommend it to friends and family, and make repeat purchases. After looking at more than 40 variables, including price, brand perception and interaction, the company concluded consumers preferred a business that offered exactly what they needed as concisely and conveniently as possible. In essence, consumers like the simple life, and a subscription-based method keeps things easy and provides the services they want. 2 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

3. "Keeping choices as simple as possible maximizes consumer retention." Providing value and simplicity Subscription options give consumers a product they want at a price they can afford, and the option of automatically recurring payments makes the process simpler than sending a check or bank information on a consistent basis. Businesses should keep the consumer perspective in mind when designing what sort of subscription options to offer. Keeping choices as simple as possible maximizes consumer retention and therefore leads to higher revenue. One aspect to consider is the duration between each payment. Charges can occur on a frequent, infrequent or freemium basis. Frequent subscriptions generally charge customers on a weekly or monthly basis, but they can extend payments as long as once per quarter. Infrequent subscriptions extend payments to a minimum of six months. The freemium option works much like the frequent choice but gives users access to limited services free of charge. To determine which selection consumers find the most simple, businesses should compile as much market research as possible. There are pros and cons for each option, and only consumers themselves can indicate which one will be most beneficial. Although infrequent charges would seem simpler because they occur less often, some may find them more cumbersome than their frequent alternative. Fewer payments spread over a longer period of time means customers have less contact with a business. 3 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

4. Therefore, the company in question isn't as able to pick up on any signs of dissatisfaction, so the customer has to do more to get the organization's attention. What's more, infrequent payments are generally higher than their more regular counterparts, and the extended time in between makes it more likely a customer's payment information has changed. All of these factors may be more annoying than frequent charges. There are many other factors that contribute to simplicity, including price, payment options, ease of contact and more. Subscription billing is just one way companies can provide the best for their customers, but it does make the process of paying much easier. 4 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

5. About the Author: Bryta Schulz Bryta joined Vindicia in 2013 and serves as Senior Vice President of Marketing. She is responsible for building brand awareness, creating go-to-market strategy and promotion, and driving growth. With over a decade of executive level marketing, product management and PR experience, Bryta has led marketing teams in enterprise technology and SaaS companies. Her experience includes heading product marketing at GoGrid, PGP, RSA and Symantec and business development and product management positions at Xcert, Thales, and Persistence Software. Bryta holds a MA in Translation from the Johannes Gutenberg University Mainz and an MBA from the University of Reutlingen. Visit our Blog for more information. 5 © 2015 Vindicia, Inc. All rights reserved. Vindicia Confidential.

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