Why use credits instead of subscriptions? Or… why not use both?
Or… why not use both?
If you manage a lesson or service-based business, using credits can improve both management and revenue while increasing customer satisfaction. Here’s how they work and why they’re a beneficial choice.
The points discussed here are based on over ten years of analysis on thousands of centers and direct feedback from administrators.
Empirical data shows that the “pay-per-use” credit model is often more effective than traditional subscriptions.
Of course, results vary based on factors such as customer type, location, and pricing, but in general, a positive trend in favor of credits has emerged in most centers analyzed.
If you’re willing to keep reading, in just a few minutes you’ll discover why…
How do credits work?
“Credits” represent a flexible payment system. Each class or service is assigned a credit value, and customers can only book if they have enough credits available. Credits can be loaded by the manager or purchased through the app (if in-app payments are enabled). It’s advisable to assign a euro value to credits to simplify managing services with different costs.
See HERE for details on how BookyWay credits work.
Why are credits more advantageous than subscriptions?
💸 Detachment from money
As in resorts, converting money into credits reduces the perception of spending as “money.” This makes customers more inclined to use services without the psychological burden of direct spending.
👫 Accessibility for new customers
Credits allow new customers to buy only the activities they want, even a single class, spending less than a full subscription. This encourages customers to try the center without a high initial financial commitment.
🗣 Lead generation
Through credits, you can create more targeted promotional campaigns. For instance, you can create a landing page to attract customers by offering a small credit package for free in exchange for their data. This facilitates lead collection, encouraging potential customers to log into the app and try the services. (This topic will be further explored in a future article.)
🫰🏼 Seemingly smaller expense
Paying with credits, being flexible in nature, often requires a lower initial expenditure than a subscription. This psychologically encourages the customer to proceed with the purchase without the fear of an excessive commitment, increasing conversion rates.
💜 Flexibility and loyalty
Customers can try different activities without being tied to a specific type of subscription. If an activity does not appeal to them, they can use credits to try something else, improving loyalty and reducing the risk of dissatisfaction.
🏄🏻♂️ Promotion of new services
The credits already available in the user’s “wallet” can stimulate them to spontaneously participate in new activities or events, without the need for complex promotional campaigns. Immediate accessibility makes it more likely for customers to try the new services offered.
🚴🏻♂️ Creating extra experiences and incentives
A credit-based system allows the manager to offer customers special activities beyond regular classes, such as a social dinner, group outings, or exclusive events. These extra services can be purchased with accumulated credits, adding value and making the customer’s experience more complete and engaging. Additionally, these initiatives increase the sense of community and participation, providing an extra incentive to stay active at the center.
Switching to a credit-based system can therefore increase profitability and customer satisfaction, offering a more flexible and engaging purchasing experience. Consider integrating credits into your business and discover all the benefits of this approach!
Further Insights:
See HERE why enabling in-app payments can increase your revenue.
See HERE why selling credit packages instead of lesson packages is a winning choice.
