All subscription business models are based around the reoccurring selling of a product or service. There is a huge focus on keeping existing customers rather than seeking new ones, and developing positive, long lasting and mutually beneficial relationships. Most subscriptions are charged either monthly or yearly, and where possible payment is completed automatically via credit card or direct deposit.
There are two main types of subscription business models. The first is when a business offers access to a product such as online software, an app or some other type of content or membership. The second is when the business provides a repeat service where they provide physical products to the customer.
In this article, we'll explore several examples of businesses offering subscriptions, plus look at the pros and cons to help you decide if this business model may be suitable for your business.
There are many types of businesses which use the subscription model successfully, some of which you probably even subscribe to. Popular subscriptions include:
More generic subscription offerings include coffee, pamper packs, online software, magazines, snacks, toys, razor blades and books. As long as the business offering the subscription provides something a customer wants on a regular basis which is good value, there's a high chance the subscription will be beneficial to both parties.
There are both pros and cons for choosing to use the subscription model for your business. Some of the key benefits include:
Some of the negatives for the subscription model include:
For further information on operating a subscription model for your business, make sure you read the other articles in our subscription business model guide.
Posted: Thursday 13 January 2022