What is a Subscription Model and Why Should You Consider Implementing it?

A subscription business model is a recurring revenue model in which customers pay a weekly, monthly, or yearly fee in exchange for your products or services. Customers can renew their subscription after a certain period of time. This model allows you to leverage your customer relationships to create a steady stream of income.

Subscription-based revenue models benefit both the company and the customer. As a customer, you have the convenience of automatically repurchasing a product or service that you know you’re going to need in the future. As a business, you retain customers for future sales rather than needing to re-engage them on a more frequent basis. You secure a monthly recurring revenue, which can keep your business afloat throughout the worst times.

For every product, brand, and industry, a subscription model can be a deployed in an effective approach to run your business.

How to Implement a Successful Model of Subscriptions in Your Business

Developing a subscription service should look fairly similar to the business planning processes. It involves upfront research, analysis, defining your customer needs, and finally testing and execution In a subscription model, customers are charged on a recurring basis for a product or service. They choose how long and how often they want to receive each offer, and most subscriptions provide the option to renew or cancel at any time.

Think of a subscription as a contract between you (porridge seller) and the customer. The customer agrees to pay for pack porridge and toasted for every Mondays and Wednesdays for a month and the business fulfills that offer so long as the customer completes their recurring payments. When the contract is up, the customer has the option to renew or cancel their subscription.

Different Strategies To Increase The Value Of Your Subscription Offerings

A subscription should be special. Subscribers need to feel like they’re constantly getting value out of your product or service — otherwise, why would they continue to pay for it?

Creating value for customers means providing useful products and services that customers consider worthy of their time, energy and money. For customers to find value in a product or service, its perceived benefits need to outweigh its cost. Creating value means maximizing benefits within an acceptable price point.

Benefits and cost are the two key components of customer value. Benefits can include aspects like quality, popularity, accessibility, convenience and longevity. Increasing your benefits without increasing your cost can raise the value of your product or service for your customers.

Use this strategies to maximize the value of your product and services

Case study & Model

Using the porridge seller who wants to increase sale by adopting a subscription system, we are going to list 4 stages

• Novel Stage: This is where the seller start with a plan on how she is going to execute he plan
• Experimental: At this stage the seller can start asking her regular customers what they think about her new offer
• Scaling: this is where the seller introduce her new idea as a package
• Final leverage :At this Point she must make adjustment to create a better experience for her clients on the plans

Benefits of a Subscription Business Model

• Subscription models are convenient for customers.
• Customers can discover new products.
• Businesses can accurately predict revenue.
• Subscriptions can attract more customers.
• Subscriptions decrease customer acquisition costs.
• Businesses build stronger relationships with their customers.