Charge By PayPal Subscription Or 1 Time Payments?

Here is a question for you. Which way is is better to charge customers? It could be for advertising on your blog, for an online training course or just about anything where there are going to be repeat payments. For some items, like an e-book there is only 1 download and no follow up (providing you are not offering anything else), so there would be no reason to charge using PayPal subscriptions, but when is it best to use subscription payments?

Photo by preciouskhyatt

What Are Subscription Payments and 1 time payments?

Subscription payments are when your customers accounts (paypal) are automatically charged a flat price each month, unless they unsubscribe.

1 time payments are simply when a customer pays a single fee once, with no subscription to pay again next month.

Reasons To Use Subscription Payments

Assuming you have a product where subscriptions would be suitable, here are some reasons they are better than using basic 1 time payment buttons

• Customer is more likely to pay for another month as often they are too lazy or forget to unsubscribe.
• More predictable and stable income. If I had 100 people subscribed I could be certain that a good number of them would continue next month, but if 100 people had paid for something without subscription I would be very worried about how many would stay on for another month
• Builds up a base of repeat customers. Its not just that on 1 month more people will stay subscribed to paying, but every month more customers will be added to the loyal customer base.
• Easier to sell the business. A potential buyer of the business will worried (and rightly so) that once you have left, the sales will dry up. If you can say to the buyer you have a group of people subscribed to paying you each month you are a much safer option for them.
• Saves resources on finding new sales. It is much easier to convince someone who has already paid to pay again, especially if they have to take action to not pay, than actively finding new customers.

Reasons To Use 1 Time Payments

• More attractive to new customers. You can flaunt the fact that they are only agreeing to pay for the first ‘batch of articles’ (or whatever your product is) and that they can simply walk away without even having to unsubscribe. This isn’t likely to make a huge difference and surely wouldn’t make up for the fact you are losing more customers every month than with subscription payments.
• Your product isn’t quite finished. If you have the first installment finished but not quite finished the 2nd it would be a big risk to charge people automatically for the 2nd. Imagine how your reputation would be damaged if you charged people for something that didn’t exist!

Conclusion

From these reasons, providing you have a suitable product, subscription payments are definitely the best option.

What do you think?