How to solve the conversion problem with autogiro payments in your subscription business

Current autogiro solutions are delivering low conversion. Find out how digital autogiro payments can increase conversion in your subscription business.

Subscription-based businesses often use autogiro as their preferred payment method. The problem is that autogiro in direct sales is known for low conversion rates. Those sales channels, like telesales and field sales, in general, have a higher sales cost and with ineffective payment methods, the investment won't live up to its full potential. Moreover, every subscription business owner knows how valuable each paid order is, thus, an increase in conversion gives you higher recurring revenue. So how can you take advantage of autogiro to increase conversion?

What is autogiro?

Autogiro is a recurring payment method that automatically withdraws the money from your customer’s account on the due date without you having to actively do the payment as with, for example, an invoice. Autogiro is quite a common payment method used in Sweden and its popularity is continuously increasing as it follows the growing trend of subscription businesses. In order for you to adopt this autogiro payment, your customer has to sign an agreement, called autogiro mandate, either through a web-based form or paper form.

When it comes to both options, you often have to fill in a lot of information which can be a barrier as it’s a lengthy process. You might even accidentally fill in the wrong information which will prolong the process further. The paper forms also come with additional issues, for example, you have to print the form, sign it, and mail it. Then it takes a few days before it arrives at the potential customer and a few more days for you to get it back. Apply this to some errors in the contract, you have an even longer process. If the merchant isn’t offering autogiro, customers often use paper invoices instead which leads to higher costs and time-consuming management of the papers. This creates an incentive among businesses to get their customers to choose autogiro instead.

Through a study that was made by Waytobill, we found that a majority of the participants thought that the current solutions for signing up on an autogiro contract are a complicated process, especially highlighting the fact that you have to fill out these forms. There’s just too many steps that you have to go through, and in most cases, the customer can’t finish the process until later, due to having to fill in a form that is received a while after the call. In turn, the motivation to actually finish the payment decreases, which has a negative impact on the conversion. This leads to a need for a more user-oriented solution that is quick and easy to use for the customer, which ultimately could result in increased conversion.

Why autogiro?

So why is autogiro a good option? First of all, it’s great for retention as the payment will be withdrawn automatically each month from the subscriber’s bank account. This means that the subscription is automatically renewed and the customer only has to take action if they want to cancel the subscription, otherwise, everything else is handled without any effort on the subscriber’s part. This often leads to the subscription being renewed for a longer time. Autogiro is also a very modern solution to use when it comes to subscriptions, compared to having to actively go through with the payment every month as with an invoice. But why not just use your credit card? That has the same properties of withdrawing the money automatically. However, the issue with credit cards is that they expire at some point and then the payment will fail, which is something that occurs more often than people changing their bank accounts. This shows that retention is greater for autogiro than credit card payments.

When it comes to Waytobill’s autogiro solution, the hassle of filling out a huge form is out of the picture. Instead, the customer’s information is sent from the sales system which reduces possible errors and simplifies the process. Additionally, we use BankId to fetch customers' account information in a safe and convenient way. Our user study confirmes that this process is seen as being easy and quick, which together with feeling secure are three important attributes people pay attention to when performing digital payments.

Adapt to your customers

While autogiro may be the perfect fit for some, it might not be the case for everyone. Some people prefer to have full control over each payment and therefore would choose invoice as their go-to payment method instead. No matter how good of a solution you’re providing, you’ll never satisfy 100% of the customers. However, you’ll reach a higher percentage than before. It’s also essential to remember the importance of providing a variety of payment methods so that your customers can find one that suits them. Just like with pick and mix candy, there’s something for everyone.

Increase conversion with autogiro

As previously mentioned, easy-to-use, quick, and smooth are attributes that customers value when doing a purchase through a checkout solution. Hence, in order to increase your conversion, these attributes need to be at the core of your checkout. We’ve noticed that merchants usually struggle with the same problem; conversion in connection to autogiro with current solutions. In some segments, as much as half of the customers abandon the payment. This indicates that long, complicated web-based and paper forms are limiting the potential for merchants to increase conversion through autogiro. The potential to build a higher volume is big and each increase in percentage is very valuable.

Using autogiro in a subscription business is a safe bet, but make sure to not lose your conversion. Considering your customer needs and adjusting your proposal to maximize conversion is very important, while you also have to make sure your retention is as high as possible by choosing a provider that can make that happen. With Waytobill’s user-friendly checkout, you can increase your conversion for autogiro payments and lower the barrier for your customers to go from leads to actual paying customers. Contact us today to learn more about how to get started.

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