Today’s customers demand flexibility in their purchasing decisions, and many companies are not prepared to offer custom solutions to digital-savvy prospects. This situation creates a lost opportunity for the marketing and sales teams.
Legacy software often limits a team’s ability to up-sell a customer, bundle products together, or offer enterprise customers custom pricing. There is also often no easy way to run promotions and real-time reports on ROI and retention.
Marketers have had challenges for years in gaining market share and offering more to existing customers. The last thing marketers and sales teams need to be worried about is a complex billing system that hurts the ability to close sales. But that is what is frequently happening as a result of poor billing practices.
One such solution to grow revenue is to offer configurable subscriptions to your customers instead of a one-size-fits-all product. If done using the right platform it has the potential to also reduce costs It is a sales strategy that has grown in popularity across multiple industries over the past decade.
What is a Subscription Business Model?
Unlike the old days of a simple one-size-fits-all magazine or newspaper subscription, today’s customers want to review the components of your product and pick the package that best suits them and pay on an ongoing basis. These models are also designed to allow customers to scale up or down as needed - putting customers at the center of their own purchase.
By implementing a subscription-based model, not only will you be better meeting customers' needs but also you will find you have created a more reliable and predictable recurring revenue for your business.
How can a subscription business model support my business?
You may be unsure of how a subscription-based option for your customers could impact your operations and revenue. There are many ways this can work to provide the best value to your team and ultimately, your customers. It all depends on your product, the sale cycle and what your customers need.
- Membership Programs: This can take a lot of forms, but fitness centers are the perfect example of membership subscriptions. But these may also come in the form of dinner clubs, discount shopping clubs, monthly subscription boxes, and wine clubs. Membership programs may also offer in-person experiences and opportunities to add value.
- Service / Retainer Plans: For decades, ad agencies have operated under the retainer subscription model and now more and more businesses are moving to some form of service/retainer plan with their clients because businesses are demanding more clarity and flexibility. In today’s economy, many home service companies (home cleaners, appliance service, etc.) now offer a monthly subscription plan for unlimited support as needed. Ultimately, these types of subscriptions allow customers to purchase recurring services on a frequency that works for them.
- Offer a SaaS Product: Nowadays, Saas (Software as a Service) are often priced as subscriptions. Everything from OTC website builders with Wix and Squarespace, creative design services, and project management software; they all operate on monthly subscriptions and user counts. Think of our everyday products like Netflix, Spotify, Amazon Prime, and Disney+. These are all products that provide a service for a monthly fee. Many of those also have tiers so a user can decide on certain attributes of their own product purchase.
- Bundle Services: This is a bit different than recurring service plans. Here, customers pick the services or products they want on a recurring basis, but in an a-la-carte manner. This allows consumers to select exactly what they want at a predetermined price. This type of subscription model is successful because often customers just want a few aspects of a product, because they know what they are going to use. Cable companies have worked in this model for decades.
How can I implement a subscription-based business model?
The first thing to remember is to design a subscription model that works for you and your customers. Review the pain points your customers express during the buying process and design a program to adapt to their needs. This will ultimately lead to more sales and the ability to later up-sell now that they are already customers.
The purpose of implementing any subscription model is to serve your business. Make it work for you to support your business and your team. That’s why the Billforward tool is designed the same way; it offers services as needed like subscription management, recurring billing and invoicing, reporting, and analytics.
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