Starbucks & Amazon Streamline Checkout and So Can You

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Best Practices subscription trends

SubscriptionTrends_2x_Purple.pngBusinesses are always looking for ways to make it easier for customers to interact and make purchases. Starbucks launched a mobile ordering system nationwide in 2015, letting customers avoid the long lines at the store by using the Starbucks app to place their order which is then waiting for them when they come into the store. Tesco, a UK grocery store chain, recently debuted their “Scan As You Shop” system where customers use a handset to scan their own items and then put them directly into their bags in their shopping cart.

Amazon, ever at the forefront of innovation, is taking this concept one step further with their Amazon Go convenience store concept. Shoppers merely scan their smartphone when they enter the store, and the company's "just walk out" technology detects which products are selected. When the shopper leaves the store, Amazon charges their Amazon account.

Subscription businesses too have ways to support an improved checkout experience that removes friction for their customers, improving customer satisfaction and increasing revenue.

Automatic retries: For example, issues with the customer’s recurring payment cause friction and can result in customer churn if the payment is not eventually successfully processed. One way subscription businesses address this challenge is by automatically retrying the customer’s credit or debit card, ideally on some optimized schedule which is based on the reason for the payment decline. Through this automated process, payments that initially fail can eventually succeed with no need to contact the customer.

Dunning: Of course, when the transaction fails, another common approach is to notify the customer directly that there’s a problem. In payment parlance, this is called “dunning,” and it entails automated emails to a customer when their payment has failed. The emails direct the customer to manually update their payment information by phone or via the customer’s account page on the company website.

Customer communication: Of course, there are other reasons to contact customers beyond payment issues. A subscription business may need to let them know about changes to their subscription plan or their account, send them things like renewal reminders, information about password resets, or activity related to gift card redemptions—basically anything that the customer might need to know or might find useful. To be scalable, these emails should be system-generated. Merchants should also be able to customize them to match their business’ voice and brand identity.

Fraud is another area that causes friction. For the customer, this can come in the form of a “false positive.” This occurs when a customer’s transaction is declined on the mistaken belief or indication that the purchase is fraudulent. Many e-commerce businesses use an automated solution to detect and mitigate fraud. However, they need to strike the right balance, denying transactions that are actually fraudulent while processing and receiving revenue from the legitimate ones. A sophisticated, well managed fraud solution, with customizable rule sets based on the latest fraud trends and expertise, helps subscription merchants find the proper middle ground.

There are other ways too of reducing friction for your subscription customers, which we outlined in a previous blog post. And be sure to register for our upcoming webinar, “Subscription Best Practices: How to Reduce Friction and Accelerate Revenue Growth” on Sept. 13th.

 

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