Charging every month: monthly fee, subscription, or membership
Know how to decide, so you can set it up in your payment processor: your recurring payment plan (subscription, membership, or monthly fee), its price and billing cycle, and what to do when a payment fails or someone wants to cancel, so you don't lose a customer who just had an expired card or needed to pause for a while.
Right now you charge every month by hand: a bank transfer, texting each customer to remind them, or hoping their card is still the same one. Every month a few slip through the cracks, and not because they wanted to leave: you forgot to charge them, or their card expired and nobody noticed. You're also not sure whether what you sell is a subscription, a membership, or a monthly fee, whether to bill monthly or yearly, or what to do the day a payment fails without making the customer feel chased.
This course works out that billing plan from start to finish, so you can set it up in your payment gateway's recurring billing tool, Stripe for example. First, it decides what type of payment yours is, its price, and its cycle; then it figures out that first charge when someone signs up; next, what you do when a card expires or a charge fails before you cut off service; and it wraps up with the three ways to handle a cancellation, so you don't lose a customer who just needs to pause for a while.
This is for anyone who already charges, or wants to start charging, every month for what they do, not for someone who just sells a single one-time product.
- How to choose between a subscription, a membership, or a fee based on what you're really charging for
- How to set the price and the cycle, monthly or yearly, based on your cash flow and how much the customer trusts you
- How to decide whether the first charge falls on signup day or on day 1 of the cycle, and how to explain it to the customer without confusion
- How to decide what expired-card notice to show and how many retries to set in your payment gateway before cutting off service
It helps to already have a payment gateway, Stripe for example, that supports recurring billing.
The 6 lessons
In the order it makes the most sense to read them.
- 1
Subscription, membership, or fee: pick the one that charges for what you actually give
By the end you'll know whether what you sell each month is access, belonging, or your own work, and you'll have the exact wording to charge for it without overpromising.
8 min - 2
Monthly or annual: that's two decisions, not one
You need to price your monthly fee for what you actually deliver, then pick your billing cycle based on your cash flow and how much the client already trusts you, without mixing those two decisions into one.
4 min - 3
Decide the first charge: signup day or day 1 of the cycle
You'll know whether to charge on signup day with a prorated amount or wait for the natural cycle, and what the customer needs to see so they don't mistake that first charge for an error.
5 min - 4
The card expires before the desire to keep paying does
Turn on your payment processor's expiring card alert and the link that lets the customer update it themselves, so they never have to read you the number or wait for a failed charge.
7 min - 5
A failed payment doesn't mean a customer wants to leave
Decide how many retries and reminders you send after a failed payment, and how many days of grace you give before cutting off service, then set it up in your payment gateway.
6 min - 6
Cancel now, cancel at the end, or pause: canceling has three ways out
You'll come away knowing which cancellation option you offer by default, when to process it right away, and when to offer a pause instead to a customer who just needs a break.
7 min