Did you know that having a Prepaid Subscription option in your WooCommerce store can increase your revenue? Yes. If you are selling subscriptions on your online store, then offering a prepaid subscription option will allow your customers to pay in advance (upfront) for the entire plan. This can open ways to increase your revenue. Want to know how? This post can help you understand and set up prepaid subscriptions on your WooCommerce site.
Before the steps, let’s understand why prepaid subscriptions is the need of the hour.
The main idea behind subscriptions is the convenience, for both buyers and sellers. The customers get the products continuously and comfortably, whereas for the store owners, it is a solid measure of how much business they would do through the recurring revenue. All good. But, the problem arises when the customer has to pay the next due.
Here are some problems that generally arise:
- Customer might miss the payment due, and face a discontinuity of services.
- Customer might not want to continue the subscription, and unsubscribe from the plan.
- If the customer has opted for auto-renewal, a failure in the system can lead to inconvenience.
There is a good chance that you have faced these problems already on your WooCommerce store. If not, let’s make sure now that you don’t face them later. So, how can you avoid the problems with recurring payments?
Prepaid subscriptions is the best solution. Because it not only makes things easier for the customer, but for the store owner as well. Here’s how:
- Less churn rate: The customer makes a clear decision before making the payment, so there is a very less chance of unsubscribing. Hence, less churn rate.
- Lump sum payment: You get the full (or half) amount in one go. It depends on how many issues you charge upfront.
- High customer engagement: You can focus on improving the product quality and acquiring new customers now because your product will keep the subscribed customers engaged. That is, the marketing cost for engaging with the customers will reduce significantly.
Great! So, how to set up prepaid subscriptions using WooCommerce Subscriptions? You cannot.
Yes. It is a great extension to use for selling subscriptions on your online store. But, only when you start using it, you will realize that there is no option to provide upfront payment. While there is a workaround suggested by WooCommerce, they themselves acknowledge the drawbacks behind the tweaks.
A lot of WooCommerce store owners feel this shortcoming should be rectified. And fortunately, a solution exists! The WooCommerce Prepaid Subscriptions is the way to go. Let’s delve into how to provide upfront payment for subscriptions using this uber cool WooCommerce Subscriptions extension.
How To Set Up Prepaid Subscriptions For WooCommerce site?
Step 1: Install the plugins
Install WooCommerce Subscriptions and WooCommerce Prepaid Subscriptions into your online store to get started.
Step 2: Create the subscription
Let’s take an example for a clear understanding. Imagine you are selling a magazine subscription that renews at $6 every month for 10 months. And let’s say the product is on a sale and now sells at $4.99 every month. So, base price - $6, sale price - $4.99 and magazine subscription is for 10 months.
Now, to create this subscription plan, add a new product in your WooCommerce online store and mark it as a subscription product in the product type, either simple or variable.
Step 3: Configure the subscription
Enter the product details with the name, length of subscription, price every month / day / year, subscription length, Sign up fee, free trial period, etc.
For our example, let’s give the following details:
- Product name - “Simple Magazine Subscription”
- Subscription price - $6 every month
- Subscription length - 10 months
- Sign-up fee - 0 (You can charge a sign-up fee if you want)
- Free Trial - 0 days (If you want to provide a free trial, you can give it for days / weeks / months / years). Our example doesn’t need one.
- Sale price - $4.99 without a schedule. The sale price is optional, and will be applied for the particular days if you schedule it or will be applied for each issue.
Here is a screenshot of how the configuration will look like:
You can also enter other inventory, shipping, product images, description and any other details related to the subscription product.
Now, if you have installed the WooCommerce Prepaid Subscription extension, you will find some more options right below the subscription product details. You do not have to switch to any other plugin page.
And here goes the next step.
Step 5: Allow Up-front Payment
In the upfront payment section, you’d find around 5 fields. Let’s go one-by-one. The first field is for enabling the pre-payment option. So, choose “Allow up-front payment only” if you want only up-front payment option or “Allow up-front payment and recurring (Customer to choose)” to give both the options. Our example allows both the options, so we’ve chosen the latter.
Step 6: Define the upfront payment duration with Subscription length field
The next field is Subscription length and it is there to define for how long you are taking an upfront payment. For example, you could take either a 6 months upfront payment for a 1 year subscription, or a whole 1 year upfront payment.
The drop down box will show options according to the subscription type. That is, if it is a monthly renewal plan, the options will be in months. Or if it is a weekly renewal plan, the options will be in weeks. You can charge an upfront payment for whatever period within the entire plan duration. So, go ahead and choose one according to your subscription plan.
In our example, you’ll get monthly intervals and we choose 10 months so that the customer pays for all the 10 months in advance.
Neat, isn’t it? Now comes the interesting part.
Step 7: Give discounts for upfront payment (optional)
You can also give discounts to your customers to encourage them to pay upfront. Most customers are comfortable with recurring payment for each renewal, if both the payment methods offer the same value. But, when you give a discount for the upfront payment method, they will go for it.
For example, let’s say you are selling yearly subscriptions that renew every month, and your customers have been paying in recurring intervals each month. When you introduce an upfront payment option where they can pay in advance for the entire year but without any discount, only a very few customers will be sure about making the payment because they are not used to it.
But, if there is a discount, it saves them some bucks, and they would make the upfront payment. As a customer, I would. That is why the WooCommerce Prepaid Subscriptions comes with an in-built discounting option.
You can choose between a percentage or a fixed price discount, and enter the value of the discount in the next two fields, Discount Type and Discount Amount.
Step 8: Add additional message for the upfront payment
The customers need to know what they get with an upfront payment, don’t they? You can write about this new payment option you have enabled in the last field “Upfront Additional Message”. The message will be shown near the “Pay Upfront” button. You can leave it blank as well.
Our example has a simple line saying, “Pay upfront and get 10% discount on the total price!”.
Hit the “Publish” button to make your whole new subscription product live. If it is an existing product, click the “Update” button. You are now good to go.
With these settings, here’s how the product will look on the storefront.
The total amount is also displayed. Let’s take a look at what the customer’s cart would look like if he chooses either up-front payment, or a normal sign-up.
If the customer chooses to sign-up for monthly payment, then the cart will look like the following screenshot:
Whereas, if the customer chooses to pay up-front for 10 months, then his cart would look a bit different:
Now that you are familiar with the process, you can try creating a subscription product yourself at our demo site and check how flawless it is.
Cool, isn’t it? You should totally try it out if you want to take your subscription business to the next level and earn:
- Customer satisfaction leading to customer loyalty
- Better product quality and brand image
- Long term business
- Lump sum cash flow
- Predictable income
What are you waiting for? Oh, did you like the article? Then do share your views about WooCommerce subscriptions and the prepaid subscriptions concept in the comments below.