Dynamic Subscriptions

Why Consumers and Merchants Both Love Dynamic Subscriptions

eCommerce opened up the subscription billing model to a whole new range of goods and services. Subscribers’ expectations have changed a lot over the years, though. Contemporary customers want more options and flexibility than a traditional subscription service can deliver.

The good news: technology now makes it possible to offer a more dynamic subscription experience than ever before.

In this post, we’re going to talk about what makes a subscription model dynamic. We’ll see how an interactive process could make your subscription service more profitable, and how it could alleviate some risk factors plaguing traditional subscriptions.

Vulnerabilities of a Static Subscription Strategy

The idea behind subscription services is simple. You send products to subscribers on a predetermined schedule. In response, customers pay a set amount each billing period (monthly, quarterly, annually, etc.).

Customers love the convenience and predictability of subscriptions. As a merchant, you're sure to love knowing you have a certain amount of guaranteed ongoing revenue. It’s a win-win.

Like we mentioned, though, eCommerce has changed customers’ expectations. A static “set-it-and-forget-it” subscription business model can’t address their demands.

They want a service that can grow with them, evolving and adapting to their changing needs. They want faster response times, free returns, and 24-hour access. They want customized bundles, changeable contact and billing options, and increased flexibility over the entire life cycle.

In other words, consumers want subscriptions that are dynamic.

Comparing Sales Models:
Traditional vs. Dynamic Subscriptions

Transactions follow a repetitive linear path in the traditional subscription sales model. Once the account is set up, it can essentially be ignored by the merchant. Everything happens automatically according to a predetermined flow:

There’s no built-in method for customers and merchants to communicate. In this model, though, there really isn’t a need to.

Sure, the merchant may occasionally contact buyers to provide some level of support. Or, customers may call the merchant if information needs to be updated. But these are separate actions; they’re connected to the sale, but not part of it.

With a dynamic subscription, customer communications and services are interconnected. Subscribers enjoy seamless access over a variety of channels and devices. They can change, pause, or cancel services in real time. Addresses or card data can be updated through secure transmission, with the information automatically synched between devices.

Providing back-and-forth communication completely upends the traditional subscription model. It replaces this outdated approach with something that looks more like this:

With a dynamic system in place, a customer can shop on a desktop computer, arrange delivery from a tablet, and contact customer service from a cell phone. They can do all this at their convenience, too.

This this helpful for subscribers. Plus, it also provides more channels and opportunities for you to reach them with new product features, special offers, or price changes.

Other Benefits of a Dynamic Subscription Service

Besides convenience and communication capabilities, what does a dynamic service look like? Typically, you’ll see features like these:

How Do Dynamic Subscriptions Impact Fraud & Chargeback Risk?

Fraud and chargeback risk tends to get overlooked when talking about subscriptions. It shouldn't, though. It's one of the most significant advantages offered by the dynamic subscription model.

Customers should always bring issues to you before contacting their bank. In reality, however, a high number of chargebacks are filed because a customer felt contacting the merchant would be a waste of time.

Fortunately, satisfied customers are much less likely to file a chargeback. If you consistently work to develop dynamic relationships with your subscribers, they’re going to have confidence that bringing a problem to you will yield results. Keeping communications open also increases the chance you’ll spot any potential issues long before a dispute is filed.

If a customer is concerned about some facet of their subscription, they will be much more likely to go to you first, rather than the bank.

What CAN’T Dynamic Subscriptions Help With?

A dynamic subscription business model can help you leverage your recurring billing business in multiple ways. However, it won’t do much to help curb friendly fraud.

Friendly fraud happens when fraudsters take advantage of loopholes in the chargeback system to rob merchants of revenue. They may blatantly lie, claiming that a product never arrived, or that service was never rendered.

This is an especially dangerous threat to subscription businesses. In some circumstances, the bank may allow for more than just a single chargeback; they might reverse every recurring transaction dating back to the initial payment.

This is not something you can afford to ignore. The good news is that you don’t have to fight chargebacks alone.

Chargebacks911® is the industry leader in chargeback management and mitigation. We offer innovative technologies and highly customizable strategies that can identify and combat chargebacks in ways no subscription billing software can match.

Concerned about chargebacks with your subscription billing model? Contact us to learn about our risk-free solutions today.