3 Popular Subscription-Based Business Models

In a subscription-based business model, customers are charged at regular intervals for a business’s products or services. While this model may not be viable for every business, it is perfect for businesses that are looking to increase repeat business and revenue. In recent years, subscription-based businesses have grown to encompass a huge percentage of the online marketplace. In fact, from 2011 to 2016 there was a 100% growth in this market every year.

The subscription model has evolved to encompass a number of different services that have their unique advantages. Let’s discuss some of them here.

1. Digital Access

It’s become common to see major media outlets, online businesses, and even brick-and-mortar retailers move to digital access subscription models. These models involve hosting premium content assets on your website and gating them behind paywalls, allowing access only when a buyer has purchased access to the material.  

Many companies in both B2C and B2B leverage digital access strategies, offering small amounts of free content to entice readers and create FOMO about what other resources readers may be missing. This is an effective tool for engaging readers in your marketing funnel, but it also helps businesses generate consistent revenue streams that aren’t reliant on ads. 

Digital access control tools (or paywalls) come in a variety of styles, depending on how the brand wants to engage its audience:

  • Hard paywalls that offer only a glimpse of the content before payment
  • Metered access tools that allow a limited number of free articles per month
  • Freemium access that restricts certain types of material based on content or niche

In general, digital access subscriptions help brands monetize their valuable content and support diversification of revenue. Plus, getting customers to buy into an ongoing content subscription is a great way to build loyalty and keep them coming back for more -- exactly what online businesses need to generate long-term value.

2. Memberships

Second in our list is membership models. These services involve customers purchasing ongoing plans at different levels (Silver, Gold, etc.) and receiving products/services that align with their level of investment.

This is another model familiar to the average B2C buyer. Just consider how businesses like Netflix and Hulu have changed the digital media landscape. The traditional cable TV subscription model has gone the way of the dinosaur and been replaced by countless streaming services, offering consumers their favorite media with varying levels of advertisement. 

While B2B memberships may not be quite as disruptive, they’re great ways to generate ongoing revenue while giving customers access to premium services. This is a common strategy for managed service providers like IT vendors. 

A Silver level plan, for example, may offer only basic troubleshooting, helpdesk services, and phone support. A Gold plan, on the other hand, may offer complete IT coverage across channels, including remote and priority on-site support. 

Businesses should assess their offerings and consider how they could offer those services in a tiered membership format. It’s a great way to build loyalty and encourage subscribers to opt-in to higher-value contracts than they may have otherwise considered.

Plus, this subscription model comes with an additional benefit -- more data! Long-lasting memberships provide great information about each customer’s ordering habits, giving companies insight into future marketing opportunities.

3. Recurring Delivery

Recurring delivery options have been a common fixture in the B2C space for decades. Recently, however, the trend has taken off in B2B as well, with a wide array of businesses now offering their products using this subscription model. 

The idea is simple. Your customers pay a subscription fee and periodically receive delivery of your goods. Sites like Hello Fresh or Dollar Shave Club are staples in the B2C space, but in B2B, orders usually involve products or parts that help businesses better serve their own customers:

  • Replenishment components for consumable parts
  • Supplementary parts for maintenance
  • And more

With a recurring delivery model, you’ll be able to keep operations relatively simple. Customers receive similar products with a predictable frequency, keeping operations streamlined. 

Major companies such as Michelin and United Technologies have already managed to turn major profits with this model, meaning that it will be easy for you to follow in their footsteps and make good decisions for your business.

Key Takeaways

  • eCommerce subscriptions represent a new way to generate revenue and boost customer satisfaction.
  • Three of the most viable subscription commerce models include Digital Access, Memberships, and Recurring Deliveries.
  • Each subscription business model offers different avenues to support your customers and diversify your shopping experiences.

Businesses No Longer Have To Compromise On Checkout Experience When Adding Subscription Commerce. 

With Slatwall Commerce, you no longer have to worry about compromising on customer experience and running multiple checkouts when launching a subscription business model. Regardless of whether customers are purchasing only one time or signing up for recurring deliveries (or both), they can enjoy a seamless purchasing experience, while your business has the ability to manage the full spectrum of subscription selling and management within a single platform. 

If you’re looking to implement a subscription model that best suits your business's needs and long-term goals but have questions about where to start - let’s talk. With Slatwall’s headless commerce platform, you will be able to meet the rapidly changing needs of today’s customers, while gaining full control over how you sell online. 

 

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