The subscription business model is where a customer pays a regular (generally monthly) subscription price to access a product.
This model was traditionally associated with magazines or newspapers but in recent times has become the way that businesses (and individuals) prefer – and expect – to pay their suppliers.
The obvious example (for us) of this model is software. Gone are the days of paying vast sums upfront – whereupon one would receive a disc and installation instructions in the post. Instead, we expect to pay regular, smaller (and more easily-budgeted-for) amounts for a product that we access instantly via an online login and without any worries about software updates or data management.
Other examples include companies such as Graze (regular snack boxes delivered to your door) or Netflix (instant access – on any device – to thousands of films and boxsets).
Whilst the subscription model seems linked to businesses offering a product, it could work equally as well for service businesses – and may offer a way to achieve optimal balance – in terms of value – for both company and customer…
For customers, the value is in convenience and budgeting; for businesses it’s in recurring and consistent sales.
Other mutual benefits include:
Flexibility (and the ability to scale up or down)
Businesses can offer different levels of subscription packages and the customer can choose whichever suits them at a particular time).
The subscription model is not about a one-off transaction (i.e. completing a job and moving onto the next client) – it’s about a long-term relationship providing ongoing value and service to the customer.
If you would like to consider a subscription model for your business, please contact us to discuss strategy and implementation.