Yesterday, April 17, 2012, GetElastic published an article, Breaking the Shopping Cart [Infographic] by Linda Bustos, that put light on a promising trend for etailers: “The recurring revenue business model has been referred to as the “best business model in the world.” It kicks the pants off of loyalty programs, which is not a guarantee of consistent revenue, and ensures a steady stream of dollars from customers.”
For the traditional retailer selling one offs to whoever passes in the night, the recurring revenue model, much less loyalty programs, probably doesn’t make sense. But to the type of merchant who can view customers in terms of managing a subscription based customer relationship life cycle, recurring revenue models are creating a whirl. Like a Yo-yo master, merchants are going “around the world” without ever losing eye of the prize, the customer.
Loyalty programs were great strides into keeping customers around, which was especially useful when the cost per customer conversion is rising in the highly competitive world of internet marketing (sometimes reaching costs of $200 per conversion!!). But recurring revenue strategies don’t just keep customers coming back–they make it so they never leave!
What sort of etailers qualify for recurring revenue strategies? According to GetElastic, it’s the book clubs, streaming media sites, virtual software worlds (like Warcraft games), etc.
Yahoo! Store merchants can get in on the world of subscription commerce, but only with a few modifications. Unfortunately, the standard Yahoo! cart doesn’t support recurring billing options yet, but FastPivot’s developers can write custom PayPal checkout that can do such a thing. There are also 3rd parties like Ordermotion and Stone Edge that help handle the purchasing & shipping interval outside Yahoo!.
