Bike Club

Bike Club pedals its way to profit with hassle-free payments

Bike Club is a monthly subscription service for children’s bikes, allowing families to exchange bikes as their kids grow. With 50,000+ bikes out on rent, it’s the world’s biggest kids’ bike rental network and the second biggest bike rental service overall.

“Parents' time is immensely valuable, it's immensely constrained,” said the company’s CEO, James Symes. “If we can provide them with a hassle-free solution to have a really high quality, safe bike for their child, then we’ve done our job.”

James is rightly proud of the growth Bike Club has posted in the last couple of years — over 100% — but profitability is his main goal.

“The startup landscape has really moved away from focusing on growth and much more towards profitability,” he said. “When you're looking at profitability, you need to look across all your cost lines and at your gross profitability. So you're always looking for an economic but effective payments partner, and we found that with GoCardless.”

Payments, sorted

The majority of Bike Club’s customers pay via GoCardless and the efficiency of the platform generates significant savings on staffing overheads.

“We're collecting tens of thousands of payments a month and 90% of our revenue goes through GoCardless,” said James. “This has reduced our transaction fees to such an extent that we’ve increased our gross profit margin — a key metric for investors and stakeholders.”

“Because payments are easier to manage overall, GoCardless also saves us about three FTE per year, which equates to around £100,000 worth of overhead. It's been really, really valuable for our business – if we don't have GoCardless, we barely have a business.”

Seamless one-off payments makes for a better CX and less fraud

Bike Club collects an upfront one-off payment from new customers for their initial month’s subscription and delivery fees, before moving them over to Direct Debit for their subsequent monthly payments. This used to be made by card until Bike Club turned to Instant Bank Pay from GoCardless to create a more joined-up payment experience.

“Customers used to make a card payment and then fill out a separate form for their Direct Debit, but we wanted to collate all our payments into one platform and Instant Bank Pay was a no-brainer decision,” said Tracey Boyd, Payments and Fraud Team Leader, Bike Club. “It’s a seamless transition between the two payment channels making our customer journey very hassle-free."

“It was really easy to implement because it was ultimately exactly the same implementation as the existing Direct Debit setup,” added Mark Shaw, Director of Technology, Bike Club. “Now when the customer is making a first month payment and setting up a Direct Debit, those two are brought together in the same flow.”

More time for innovation 

These kinds of seamless technology implementations and the all-around simple ongoing management of the GoCardless platform means Bike Club has more engineering resources to devote to product development.

“Our e-commerce site talks to a lot of different systems and having one system less to worry about means we have more engineers to work on other parts of the website that are important to us, like the checkout itself,” said Mark. “We can focus our dev effort on that rather than having to create our own complicated payment systems.”

Support for customers struggling with payments 

The final GoCardless solution in place at Bike Club is Success+, which helps minimise failed payments and mitigate the cost of chasing them. Driven by payments intelligence data and machine learning, Success+ makes intelligent retries at the times when each customer is most likely to have funds in their account.

“The intelligent retries in Success+ allow people who have missed a payment to catch up naturally, while the solution’s data allows us to identify the ones who might be struggling so we can proactively help them get to the right place,” said James.

“In the past 18 months Success+ has helped us recover nearly £200,000 worth of revenue. Meanwhile, the clever use of machine learning means our payments team isn’t burdened with worrying about every failed payment. Instead, they can focus on helping customers who are actually struggling. That’s also allowed us to make huge savings on finance and admin costs.”

The secret to a good night’s sleep 

Safe in the knowledge that payments are well taken care of, James and his team are free to focus on continuously improving the business and adding value to customers.

“GoCardless is a system that has continuously performed for Bike Club, and the payments team love it – with very little training anyone can use it to enhance the way they look after members,” he said.

“And for me, as a business owner, GoCardless makes me feel secure. I never wake up in the middle of the night worrying about payments and I know that every day of the year GoCardless is there, supporting this business to keep going forwards.”