Running a business is challenging, and there can be instances where some are searching for ways to increase the turnover of a business. Although recurring billing is commonplace, it is still avoided by many businesses. As such, this could mean that the company is missing out on revenue regularly. Recurring billing can significantly boost cash flow and customer lifetime value for businesses in 2025. The subscription economy has unlocked a lucrative revenue stream — it’s estimated at $3 trillion globally in 2025.
Companies from e-commerce retailers to SaaS vendors, streaming services to online educators, are adding subscription and membership options. Implementing these models well can turn one-time buyers into loyal, repeat customers. However, succeeding with recurring billing in 2025 requires attention to new challenges and trends.
The following is an overview of steps that can be taken to introduce recurring billing into a business model and use it effectively.
More Revenue Using Recurring Billing
Be Aware of The Challenges
Although recurring billing is a fantastic way of collecting more revenue, it is vital to be aware of the challenges that could be faced. When subscriptions have varying renewal dates or when promotional pricing ends, you need systems in place to deliver products or services on time and bill correctly. Customer churn is another reality. Across industries, average subscriber churn hovers around 4–5% per month, meaning nearly one in twenty customers may cancel monthly. Consumer-facing sectors often see even higher churn: for example, digital media subscriptions had roughly 6.9% monthly churn in 2023.
These figures underline the importance of planning retention strategies up front. Use analytics to track usage and cancellations, and define clear renewal and exit processes so changes are not disruptive. Being aware of these challenges lets you prepare contingency plans (e.g., automated notifications for renewals or flagging at-risk accounts) to keep revenue steady.
Ensure Security Is the Best it Can Be
Regardless of the product or service being sold using recurring billing, the security of the website needs to be the best it can be. As well as instilling confidence in customers entering their details, it also ensures the sensitive information doesn’t fall into the wrong hands, which will do little to raise the profile of a brand.
Use a PCI-compliant payment system or subscription platform that tokenizes credit card data – this way, actual card numbers never reside in your database. Many billing providers offer a secure “vault” to store cards, which greatly simplifies PCI-DSS compliance. Encrypt all data in transit and at rest, and implement fraud prevention measures (such as 3D Secure or machine-learning fraud filters). Remember that subscription businesses are attractive targets for hackers since they hold stored cards. In practice, rely on proven payment gateways and update them regularly. Keeping security strong not only protects customer trust, it also avoids costly breaches and fines.
Provide Clear Terms and Contracts
Transparency is key to avoiding disputes and cancellations. When customers sign up for a subscription, give them a clear agreement or terms of service that outlines billing frequency, price (including any future price changes), refund policy, and cancellation rules. Many jurisdictions now require auto-renewal terms to be disclosed clearly (bold or larger font), so make sure your checkout and confirmation emails summarize the plan details. It’s best practice to email subscribers each invoice or renewal notice; this reminds them of the upcoming charge and provides an easy link to manage or cancel if needed.
By setting expectations (for example, “Your membership will renew automatically every 30 days at $X. You can cancel at any time.”), You reduce the risk of chargebacks and build trust. Providing a customer-friendly portal or account page for viewing and accepting the agreement is also effective. Clear communication about terms keeps customers informed and prevents misunderstandings.
Diversify Payment Methods and Streamline Billing
Make it easy for customers to pay and prevent failed transactions. In 2025, consumers expect to pay with digital wallets and alternative methods. Over half of Americans already use mobile wallets (Apple Pay, Google Pay, etc.) more often than traditional cards. Enable these wallet options alongside cards and ACH/bank debits. Payment surveys predict that QR-code checkout (33% of merchants), Buy-Now-Pay-Later plans (25%), and even cryptocurrencies (21%) will gain traction.
While BNPL isn’t typically used for recurring charges today, just accepting it on initial orders can capture more customers. At minimum, support major credit/debit cards, top mobile wallets, and local popular methods (e.g., PayPal, SEPA, UPI, etc.), so you don’t lose sales to payment friction. Equally important is handling failed payments gracefully.
A common cause of involuntary churn is expired or declined cards. Provide customers with an easy way to update expired cards or switch payment methods (e.g. a link in their account settings or reminder emails). Use your processor’s account updater service to refresh changed card details automatically. Also implement smart retry and dunning processes: if a payment fails, send polite reminder emails and retry the charge after a short interval. These tactics pay off: one subscription platform reported saving 72% of at-risk subscribers with recovery events (dunning emails and retries), resulting in an 8.6% lift in revenue. By broadening payment options and automating decline handling, you’ll reduce churn and keep monthly revenue more consistent.
Consider Products and Services That Can Be Used for Recurring Billing
Almost any consumable or ongoing service can be sold on a subscription basis. Look beyond the obvious SaaS or streaming examples. Think in terms of repeated customer needs. For instance, you could offer:
- E-commerce Consumables: Set up “replenishment” subscriptions for products that run out regularly. This could be pet food, vitamins, coffee, personal care items or office supplies. Customers love not having to reorder these items manually.
- Subscription Boxes: Curated monthly boxes (beauty, snacks, books, hobby kits, etc.) continue to grow. A personalized box can delight customers and create a habit. Offer customization so subscribers feel it’s tailored to them.
- SaaS and Digital Services: The classic model. Offer tiered plans (basic, premium, enterprise) with monthly or annual billing. Consider usage-based add-ons (e.g. extra storage or premium features for an additional fee). For example, many accounting or marketing tools charge a base rate plus per-seat fees.
- Education & E-Learning: Charge a monthly membership for access to a library of courses, tutoring hours, or professional training content. Many online learning platforms now bundle courses and charge a recurring fee. This can open your market to customers who prefer smaller monthly payments over a large one-time course fee.
- Digital Media & Entertainment: Streaming video, music, podcasts, and digital news sites are obvious examples. You can also sell premium tiers (ad-free, offline access) or exclusive content via subscription. Think beyond media giants: even niche content creators (e.g. specialty magazines, indie game developers) can use membership fees.
- Other Services: Many physical and service businesses are adding subscriptions. This includes gyms and fitness apps (monthly membership), meal-kit deliveries, automotive services (routine maintenance plans), pet-care services, or even curated fashion rentals. Even traditional retailers can add VIP clubs or maintenance programs on a subscription basis.
A recent study predicts that by 2025, about 75% of direct-to-consumer (DTC) businesses will offer some kind of subscription service. Meanwhile, customers value subscription models: in 2024, the average consumer had over 8 active subscriptions.
These trends mean it’s never been easier to justify finding a way to offer recurring billing in your niche. Audit your products and services for opportunities – you might discover new revenue simply by packaging things differently.
Recurring Billing Can Be Used for Gift Subscriptions
Practicality and affordability can be two of the most important components of a gift, so a subscription that allows people access to products and services they love can yield increased revenue for a business. The global gift market is worth tens of billions – for example, about $72.6 billion in 2024.
You can capture some of this spend by making your subscription a gift. For instance, allow customers to purchase a 3-, 6- or 12-month prepaid subscription as a gift card or package. E-commerce sites do this by selling gift vouchers that auto-apply to a recurring plan when redeemed.
Bundles also work: offer a “starter kit” or welcome box for new subscribers, or partner with other brands to create co-branded gift subscriptions (e.g. a coffee company and a book club). Promote these especially around holidays, birthdays, and special events. By marketing subscriptions as gifts, with enticing options and packaging, you attract one-time buyers who can become recurring customers.
Recurring Billing in Digital Media and Entertainment
The media and streaming industry exemplifies how powerful recurring revenue can be. Platforms like Netflix, Disney+, Spotify and others have hundreds of millions of paying subscribers worldwide. Video streaming alone is a massive market: global streaming revenue was about $129.3 billion in 2024 and is projected to reach $416.8 billion by 2030. It’s no surprise 88% of U.S. households now have at least one paid video streaming subscription.
For any business with digital content, adding subscriptions is critical. Consider offering subscription packages or bundles of content (for example, grouping back-catalog movies, podcasts, or premium articles). Create multiple access tiers (e.g. basic/standard/premium or monthly/annual) and highlight features like ad-free viewing or offline access. The data shows consumers are willing to pay: on average, people spend about $61 per month across roughly four streaming services.
To capture your share, focus on convenience and content — for instance, exclusive releases, bundled memberships with partners, or special rates for longer commitments. Flexible access (paying monthly) is especially attractive in media: a recent survey found 63% of subscribers prefer monthly billing over annual plans
Offer Flexible Plans and Billing Options
Flexibility can dramatically improve retention. Offer multiple billing cycles (monthly, quarterly, annual) so customers can choose their preferred commitment. It’s common to discount longer-term plans, but don’t force annual billing if customers want to pay-as-you-go. Surveys show 46% of subscribers would stay if allowed to downgrade to a lower plan instead of leaving, and 39% would stay if they could pause their subscription.
With this in mind, build features like “pause” or temporary hold on subscriptions (often used in fitness or meal plans). Allow easy plan changes (upgrading or downgrading tiers) without penalties. Also offer add-ons or one-time purchase upgrades (e.g. gift a workout class, book an expert session) to let customers customize their plan. In short, the easier you make it for customers to adjust their plan to fit their needs, the less likely they are to cancel entirely. Tracking trials and new sign-ups by plan type can also reveal which options are most appealing, so you can refine your offerings over time.
Proactively Engage Customers at Renewal and After Cancellation
Don’t wait until a subscription lapses to reach out. As a subscriber’s term nears its end (or a free trial expires), engage them: send an email or notification checking in on their experience. Ask for feedback (“We hope you’re enjoying X. Can we do anything to improve your experience?”) and be ready to act on it. Offer a limited-time discount or bonus if they renew (e.g. “Renew now and get 10% off your next 3 months”).
Small gestures at renewal time can pay off: research shows 63% of subscribers will stay if given an attractive offer at renewal time. Even after cancellation, keep the door open. Many customers return when their circumstances change or your offerings improve. In fact, studies find up to 20% of people who cancel a subscription reactivate it within six months. They might come back with new pricing or added features. To capitalize on this, maintain a “win-back” campaign: add cancelled accounts to a nurture list and periodically send them updates on product news, special promotions, or changes they liked.
Also, make it easy to resubscribe (for example, by not deleting their account data immediately). Treat customer relationships as ongoing – check in with feedback surveys, loyalty rewards, and helpful content – and you’ll find many cancellations can turn into reactivations or positive reviews.
Leverage Automation, Analytics, and Smart Billing Tools
Use modern subscription management tools to automate the heavy lifting. A good recurring-billing platform can handle invoicing, payment collection, taxes, and compliance automatically. Look for systems with built-in analytics dashboards that track MRR (Monthly Recurring Revenue), churn, ARPU (average revenue per user), and other key metrics. These insights help you spot trends (e.g., which plan tiers lose customers) and make data-driven decisions. Many platforms now offer AI-driven features: for example, predictive analytics to identify accounts at risk of churning (based on usage patterns or payment history), enabling you to intervene early.
Equally, automate your dunning workflows: send scheduled reminder emails or SMS for upcoming payments and failed charges. Personalize these messages – for instance, a gentle “Your subscription renews in 3 days” or “Your payment failed; update details here” – to recover more revenue. One platform’s data shows that targeted recovery emails can reclaim nearly 50% of failed payments, extending subscriber lifetimes by over four months.
Finally, tie your billing system into marketing and CRM tools. When billing is integrated, you can trigger marketing campaigns (e.g. win-back offers) and personalize outreach based on subscription status. For example, if analytics show a segment of users is highly engaged but still on the basic plan, send them an upgrade offer. The combination of robust automation and constant measurement means you can fine-tune your strategy rapidly and focus on growth rather than manual billing chores.
Engage Customers and Build Loyalty
Even with automation, never underestimate the value of human-centered engagement. Use customer data to send personalized communications: birthday or anniversary discounts, usage tips, or thank-you notes for milestone renewals. Consider a loyalty or referral program that rewards long-term subscribers with perks (exclusive content, freebies, or credits). Engage subscribers outside the billing relationship too – for example, create a community (forums or social groups) or send newsletters featuring new features and how-tos.
As industry experts note, combining technology with a personal touch is most effective. Use affordable marketing tools like email automation, chatbots, and analytics to stay in touch at scale, but complement them with real human interaction on critical accounts. When customers feel valued and part of a relationship (not just a number), they’re much more likely to stick around and even become advocates for your brand.
Conclusion
In 2025, maximizing recurring revenue means balancing solid technology with customer-centric strategies. By securing payments, offering flexible options, automating intelligently, and continuously engaging subscribers, you turn one-time buyers into loyal, long-term customers. Applying the tips above — updated for today’s market data and tools — will help your business capture more value from every subscriber and grow sustainably in the subscription economy.
Frequently Asked Questions
What is recurring billing, and how can it grow my business?
Recurring billing lets customers pay automatically on a set schedule. It creates steady cash flow, makes revenue easier to predict, and turns one-time buyers into long-term customers.
What challenges should I expect when setting up recurring billing?
You’ll need to manage renewals, promo expirations, and failed payments. Customer churn is common, so plan ahead with retention strategies and automated systems to reduce cancellations.
How do I keep my recurring billing system secure and compliant?
Use a PCI-compliant gateway, encrypt payment data, and store tokens securely. Add fraud tools like 3D Secure and clearly explain payment terms to protect both your business and your customers.
Which payment methods should I offer for better results?
Support cards, ACH/bank debits, and digital wallets like Apple Pay or Google Pay. Adding Buy Now, Pay Later can also increase sales and average order value.
How can I reduce churn and keep subscribers longer?
Let users pause their subscription instead of canceling, and run win-back campaigns with special offers. These small steps can lead to big gains in retention.
