Is a Subscription Business Model right for you?

By October 11, 2018 January 29th, 2019 Strategy

Could it be time to turn your customers into subscribers?

Customers want a simple, hassle-free buying experience. A trip to the mall? Ha! Brick and mortar is the exception – the Internet is the rule! And the subscription business model is the new darling of the Internet. Think razors, meats, kids’ clothes, beauty supplies, wine, and even dog treats. The public is signing up for recurring purchases at record rates.

The subscription model owes its success to the optimal balance of value it provides to both the company and the customer. Customers love the convenience of not having to remember to reorder, never running out, never leaving home, and the ability to easily budget for a recurring purchase. Companies love the consistency of orders, easier inventory planning, and the opportunity to retain and grow customers.

But what if you are selling a service? It’s working for massage therapy, legal advice, I.T. and it can work for you too. Consider these impacts for you and your customers:

  1. Flexibility
    Subscriptions allow you to be flexibility in tactics without having to constantly recalculate scope, costs, and budgets. You can provide different services as needed not just deliverables. Instead of project-by-project, you remain engaged all the time. As times change customers can change their objectives and tactics on the spot. You automatically receive the chance to upsell as needs change. The flexibility is endless.
  1. Ability to scale
    Subscriptions enable the customer to scale up (or down) as projects and goals change. Your customer has the security of knowing that resources will be available by adjusting the monthly subscription, no matter the scope. As a supplier you have the ability to deploy resources to this customer or others as needed.
  1. Stronger Relationships = Customer retention
    This approach can go a long way in demonstrating that you are always working in the customer’s best interests. By eschewing the project-by-project approach you become integrated in the plan for success. Your opportunities for being proactive instead of reactive increase, and the relationship strengthens. And we all know the value of keeping customers, instead of working to find new ones.

The subscription model is not for everyone, and there are at least 9 important steps to evaluate if you go that way. If you need more information we can help.