Recurring sales
how to manage them

Recurring Sales

One-off sales are really easy to handle: the client likes your product, buys it, and that’s it. Even though this model is straight to the point and easy on paper, it is not the greatest option for businesses in the long run. Of course, one-off sales have worked and are still working quite well for many companies. But the truth is that with this model, you may be making more money on a sale, but nothing guarantees that you will be making a second sale.

What is a recurring sale?

The recurring sales model is based on a predictable and stable income at regular intervals. In this case, you find clients and sell them your product many times. This can be done through different means: contracts, subscriptions or just pure loyalty.

Types of recurring sales:

Long-term contracts:

There are different types of recurring sales models. First, it can be a long-term contract which is binding for one to sometimes up to 5 years during which the company will be sure to get monthly payments in return of the use of a service – as it’s the case for telephone providers for example.

Subscription model:

It can also be based on an automatically renewed subscription. The companies can keep providing services for their customers until they decide they want to stop – because they are free to do so. This the case, for example, for cloud services, Netflix, Spotify, etc.

Loyal customer base:

But it could also be the case for just famous brands with large and loyal customers bases that are sure to keep buying their products even with no contract or subscription. This is, of course, more difficult to achieve for smaller businesses but is working quite well for big names like Nestlé, Coca-Cola or Zara for example.

Managing recurring sales:

Nowadays, most businesses are using different kinds of software to manage their clients and their sales. These tools offer a large set of features that can handle large or repetitive tasks in no time. Clients can easily order a recurring service, and it’s easy for you to track those sales as the system sends automatic invoices to the customers.

On Oclient, managing recurring sales is made very easy. You can set a frequency for your recurring sale – weekly, monthly or yearly. You can also pick a starting date and an ending that to the sale, as well as payment information (payment type, price, tax, currency). The system will then generate automatic invoices to be sent weekly, monthly or yearly to your clients or to the owner of the sale.

Advantages of recurring sales:

Getting someone to pay a higher price for a one-time sale is probably easier than getting them to engage into a weekly, monthly or yearly plan in which they will probably end up spending more. So, it is probably the easiest option to go for one-time sales.

But it is also established that it’s much easier selling a product than finding new clients. So even though you probably will be making less money per sale, you will at least be sure to have a stable and growing income in the long term. Having a large number of recurring clients gives not only stability to your business but also value. This model also conditions customers into building loyalty for your business

If you're counting on one-time sales to grow your business, you're vulnerable to fluctuations and the uncertainty of how much you’ll make month to month. Things are much more predictable with recurring sales. You can have a clear and precise idea of how much you can make. It’s very important when you have bills and salaries to pay.

How to use recurring sales?

First of all, you need to know that you can’t sell just anything using this model. Especially when it comes to physical products, finding something that can be useful and trigger interest in a longer period can be really difficult to achieve. It’s also less beneficial for you as physical products are usually more expensive: manufacturing, packaging, stock and shipping, etc.

Services, on the other hand, are exactly what this model is best for. Phone providers, streaming services, accounting services, cleaning services, and the list goes on. All of these businesses base their revenue on a subscription model. Whether it’s contractual or not, you are sure to get paid at regular intervals and thus have more visibility and safety when it comes to the future of your business.

Many businesses base their selling model on one-time sales. This model is usually imposed by the very nature of the product they're selling. That's not always a bad thing, many companies are very successful with it. But it might not be the best solutions if you want your business to fit in a logic of sustainability and stability. If you're on the safer side of the spectrum and you want to make your business grow at a steady rhythm and have clear visibility on your future, many options can be considered.

The two main options that can be considered for an emerging business are long-term contracts or subscription models. The first ones are legally binding for a certain period during which the customer will have to pay at regular intervals for your services. The second ones are more comfortable for the customers as they will keep paying for your services until they decide not to anymore, without being stuck in a long-term contract. Recurrent sales are easy to implement as long as the product or service you have to propose to your customers requires usage at regular intervals. It has many advantages, it allows you to have a precise idea about what your income expectations should be which itself allows you to manage your business more effectively. Also, it "forces" your customers into loyalty as you don't have to work for building it: their interaction with your business will already be more than just a one-time thing. Recurring sales can easily be managed with client-management software. Oclient offers many options to handle these sales: you just have to enter all the date and payment information, and the system will take care of the rest. Invoices will also be generated automatically based on the information that you will have previously entered.

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