Business subscription models have become increasingly popular in recent years. A subscription is when a business sells a product or service as a monthly or annual recurring subscription revenue.
Popular examples include Netflix, Amazon Prime and Spotify. The business world is transitioning from one-time purchases to subscription models. You can even get a subscription for takeout coffee these days and only need to pay a monthly fee.
There are numerous perks and benefits to subscriptions services for both businesses and customers. Customers can receive credit back on additional purchases, store credit, discounted shipping, early access to member-only products and free trials. Nearly 50% of all online shoppers have some kind of subscription these days, and 15% are for physical goods. For the most part, subscription services are set up online, and the product is delivered to your door, or you are given digital access. You can get plants delivered monthly, beauty boxes on your doorstep, and so much more. Subscription services are the future of online service, and customers seem to like them.
There are various types of subscription models available, including gym, food and digital memberships. LoyaltyLion highlights the importance of loyalty programmes like subscription services and their positive impact on brand loyalty.
A subscription model can simplify the entire business process and secure a fairly constant stream of revenue. It’s easier and more convenient for customers to set up payment once, over having to order items manually every single month. Customers can control when the goods are delivered and at what time so that they’ll be in for the delivery. Subscription services are all about convenience.
Subscription services also retain a larger number of customers and increase brand loyalty. If a customer has already subscribed to your monthly service, they are likely to stay with your service over switching to a new one. Customers will order from your businesses over a long period of time so you can get to know their customer behaviour and solve any queries they may have.
You can reach out to your loyal customer base with e-mail campaigns and cross-selling opportunities. Do not underestimate the value in understanding your customer’s behaviour and their opinion of your service. Use their feedback to improve your subscription service so you can secure even more customers in the future.
With a consistent customer base and steady income, you should be able to anticipate product demand and supply. You can form an accurate business plan that can be managed and adapted to any unforeseen changes. It should be easier to manage your cash flow as well.
Subscription services can make it easier to predict your business processes and ensure your company is running like a well-oiled machine