These days, we are seeing not only the emergence of electronic commerce but also the rise of the subscription-based economy. The subscription business model typically requires customers to pay a subscription fee in order to gain access to the products or services being offered by a company.
This system has the potential to significantly improve time to market for companies that are hoping to develop and deliver products and services quickly to consumers, and it can likewise radically improve customer experience for people who are looking for novel ways to enjoy the things being offered by enterprises.
Selling products and services on a subscription basis can benefit your business by providing you with a continuous stream of revenue. However, before deciding on adopting such a model, you first need to make sure that you have done what is necessary to make things work. Here are some tips that you may want to consider:
Study Customer Behavior First
Before jumping in, always test the waters first. You can’t really hope to know what sort of campaigns, offers, and price points are going to work if you don’t study your customer’s behavior, like what visitors do when they go to your website, what sort of search terms draw people into your site, or what kinds of products and services customers actually want to see you come up with. Analytics tools, quantitative and qualitative market research, and customer engagement through platforms like your social media channels can help you gain actionable insights about how best to approach the subscription business model.
Offer a Frictionless Billing and Payment System
Successfully convincing your customers to pay for your products and services is great, but aside from converting leads into paying clients, are you sure you have the right technological platform in place to make billing and payment as effortless as possible for these people? If you are selling products and services online through a recurring revenue business model, you have to have a complete subscription billing and recurring payment solution that implements frictionless payment facilities, accepts payments in foreign currencies, and reduces subscriber churn by resolving failed transactions. You owe it to your customers to make sure that they have the best experience when paying for your products and services.
Tailor Your Offerings to Your Customers’ Needs
It is understandable that you start your subscription-based business with a simple pricing and packaging strategy. However, customers’ needs are typically dynamic and predisposed to change. In order for you to keep up, you should offer not just attractive pricing for your products and services, you should also make sure that your pricing and packages are flexible. Ensure that your billing system is agile enough to accommodate this requirement. It should be able to offer responsive pricing, packaging, and bundling so your business can speed up time to market for your new campaigns and offerings.
Encourage Your Customers to Upgrade or to Continue Doing Business with You
You should also implement strategies that will allow you to leverage the billing relationship that you establish with your customers. This connection should inspire your customers to continue buying your products or services instead of trying out those from other companies. Don’t hesitate to consider different pricing models, and try to offer incentives for bulk and repeat purchases, as well as discounts for certain types of subscriptions. Find out what pushes your customers to upgrade or to accept upsells. Encouraging existing clients to remain loyal to your business leads to higher average customer lifetime value.
Adopting a subscription-based business model may seem like a difficult undertaking, but it certainly is not insurmountable. By studying your market well and creating conditions that are conducive to customer satisfaction and retention, there’s no reason you shouldn’t make it in the subscription economy.