Subscription Model
Subscription-based model refers to that charge which is recurring – typically monthly or yearly, to use the product.
Consumer behavior changes according to the trend of the industry and hassle-free shopping experience. In fact, 53% of software revenue will be generated through the subscription model by 2022. The subscription model is one of the predominant business models not only for the software industry but many others. Netflix and Amazon Kindle are the best examples of it.
When Should You Adopt the Subscription Model?
If it is working for others, that doesn’t mean it will also be beneficial for you. Below are a few things you should consider.
Target Audience: You are going to deal with the customers. You should have a clear sense of who your customers will be, what are their key problems and offer the appropriate solution.
Value: It’s important to check whether your shopper sees the value of purchasing a subscription vs a standalone purchase. Shoppers will only buy your service when they feel that their time and money are going to save.
Market Competition: Out there are so many businesses leveraging the subscription model. Ask yourself whether your product offers the solution to a need? Do your research and make sure that your subscription provides something that your shopper can’t find elsewhere.
Warranty: In order to gain success with the subscription model, your product or service should warrant a subscription.
If you check the above factors, you can consider adopting a subscription model. Or else reconsider the above points, if you don’t check off any above items.
Industries not suitable for the Subscription model
Despite being in the limelight, some industries are not good for the subscription model. Like the wedding industry, car tyres, furniture, and printers are the best example of it. Such will not work with subscription as the customer won’t like it buy on short notice.
