Recurring billing is critical for many residential services companies, whether for an annual furnace and air conditioning maintenance package, weekly lawn care, season-long lawn fertilization, quarterly pest control, or dozens, maybe hundreds, of similar homecare services. However, it can also be challenging to maximize revenues for services like these. In particular, when companies aren’t automating the enrollment or billing of those plans, they risk wasting a lot of time mired in unnecessary work and engaging in practices that might unintentionally serve as a barrier to repeat customer business. Companies that offer residential services as subscriptions with automatic billing are seeing exceptional benefits.

The Opportunity for Residential Services Subscriptions

More than 80% of U.S. consumers have at least one subscription, up from 72% the year before. Streaming services, like Netflix, are the most common subscription category today, but all segments are showing tremendous subscription growth. According to the report Optimizing Subscription Payments: How Providers Can Take the Sting out of Payment Declines, consumer subscriptions were up 220% in 2021 from the same period in 2020.

Such growth is not surprising. More and more companies see the tremendous benefits of subscriptions, including residential services subscriptions. While many companies might not think about it in these terms, many home maintenance offerings are fundamentally residential subscriptions. For example, weekly lawn care is a textbook subscription model: it’s something that’s provided and billed at regular intervals over time. The residential services industry is full of these, which is excellent news for owners who want to capitalize on the business benefits of subscriptions. In other industries, subscriptions themselves are just gaining traction; for residential services, the offering is often already set, and consumers are used to obtaining these services on a recurring basis. The opportunity, then, is to improve the scalability and profitability of these services through automation.

Fixed vs. Variable Payments

There are two main types of recurring automated billing payments: fixed and variable. Fixed recurring payments are repeatable amounts that do not change month to month. Examples include Amazon Prime and Netflix, which bill every month the same amount (with occasional price increases, of course). On the other hand, a variable subscription package might change price every month depending on usage. For example, a lawn care company might charge a single weekly fee for mowing but then charge more for months where extra services are performed such as spring cleaning, mulching and weed removal. Choosing your subscription offer will impact your automated billing.

Automated Payments: Preferred by Businesses and Customers

Residential services subscriptions can be complicated, from choosing the right offers to marketing the plan itself. But the biggest challenge may be tracking ongoing billing and payments, which can be a time-consuming chore. So can chasing down payments, working around credit card declines, and trying to win back lost customers who didn’t have the time or inclination to respond to payment requests. Automated payments are a convenient way to eliminate many of these issues, which is why so many businesses now rely on them.

Customers prefer automated payment plans, too. With automatic recurring payments, customers can “set it and forget it.” Customers also prefer to be in control of their recurring payments, visiting an online portal to make changes as needed without having to call the business and chat with a live person.

In a survey published in Mercator Advisory Group’s Report: 2021 U.S. North American Payments Insights: Subscriptions, Bill Pay, and Consumer Fraud Experience, only 15% of consumers prefer to pay “bills by mail.” Automatic payment, whether through an automated deduction from a checking account or a credit/debit card, was the highest preference chosen by consumers and by a substantial amount.

The Key Benefits of Residential Services Subscriptions

Automated billing has several key residential services subscription benefits.

Increase Productivity
By minimizing the time spent on manual back-office processes like billing and invoicing, more time can be spent working on a business.

Raise Customer Satisfaction
A happy customer is a loyal one, and customers appreciate the ease of automated billing. They also prefer online self-service so that they can update their stored payment methods and make other one-time payments.

Maximize Revenue
The payment collection process is simplified and more efficient with an automated billing system. Overdue notices can be sent automatically, and a business can be immediately notified if there are problems.

Reduce Customer Churn
Automatic billing and renewals can significantly reduce customer churn and also lead to more requests for incremental service additions.

Regulatory Compliance
Ensuring customers’ data privacy becomes a more arduous chore every year. A secure billing and payment solution reduces the need to worry about data breaches and the financial and reputation damage they cause.

For more information, download our eBook, Five Key Benefits of Automating Recurring Billing for the Residential Services Industry.

Get the Automated Billing Advantage with Rebar

Moving to an automated billing platform gives you an edge against those competitors still relying on manual billing, and it lets you keep up with those who have already made the switch. A residential services subscription, when done right, can become a robust profit center. However, implementing them can be complex. An experienced partner like Rebar can work closely with you to ensure that every aspect of your subscription produces the most benefits. It also allows you and your team the time to concentrate on growing your business.

Regardless of where you are on your subscription journey, we have the tools and expertise to help you move forward efficiently and profitably. If you already have your own payment processor and merchant account, we’ll use our modular, customizable Subscription Billing System to develop the optimal automatic subscription billing management solution for your business. However, if you’re just getting started and need an easy on-ramp to offering subscriptions, our SBS Express solution is the perfect fit. It includes a merchant account provisioned for you and managed by Rebar, along with the most important functionality of a purpose-built subscription platform.

Learn more about how Rebar helps residential services subscriptions here.