Title: Subscriptions, Are They Right For My Business?
Publish Date: 2020-04-28
Author: Art DeVaughn
The subscription model has been growing in popularity for a while now and with declining revenues due to the current business environment, it might be time to think about if offering subscription based products and services is right for you.
Subscriptions are appealing because if done correctly they can create a foundation for the long term growth of your business and actually spark ideas for new products and services above and beyond your current offerings.
This article covers the basics of Subscriptions and hopefully will help you decide if they are right for your business.
What is a Subscription?
A subscription is where you charge a customer a recurring fee for a product or service. Subscriptions can be any length of time but most subscriptions are monthly or yearly.
Subscription Vs. Payments
Face it we all subscribe to products and services. From your Netflix account to your Car Payment you are paying over time which lowers the cost of entry for consumers that are eager to use your product or service.
A subscription is where you charge a customer a fee for a non-fixed period of time.
A payment is where you charge a customer a fee over a fixed period of time.
Both are considered subscriptions but defined differently.
Types of Subscriptions
Subscription types can vary depending on what you're selling but the most common type of subscriptions are:
This subscription type is the most popular subscription and offers great flexibility for businesses that sell products with a fixed or one time price.
This subscription type allows your subscribers to pay a base cost and a per seat fee and can easily scale up or down.
This subscription type offers your subscribers the ability to pay for only their usage and again can easily scale up or down.
Billing Cycles & Collection Methods
Billing cycles can vary widely based on the type of product or service you offer but standard billing cycles include Weekly, Monthly, Quarterly, Semiannually and Annually. If your billing cycle is outside of the "standard billing cycles" make sure you choose a vendor that allows you to create a custom billing cycle that works for your business.
Collection Methods are pretty industry standard as well. Billing customers "automatically" is the norm, but if your customers are used to or want to pay manually online or with a physical invoice, so make sure you take that into account.
Some other considerations to think about include Set Up Fees, Base Costs, Free Trials, and Coupons. Understanding these considerations will help with how fast you can acquire customers.
Store Front and Buyer Portal
If you're going to offer subscriptions you'll need a place for prospective customers to purchase or register. Your store or registration page should be responsive in design (works on all devices), straight forward and simple to use.
A buyer portal, including an automated forgot password generator, is essential for subscribers to manage their account. Your buyer portal should be responsive in design and simple to use. Remember buyers want to manage their account or update their payment information and don't want to have to "learn" a new software, they just want to sign in and get it done. Allowing customers to manage their own accounts will save time and money when compared to the "manual way" of days gone by too.
Knowing if a Subscription Model or Payment Plans are right for your business is going to be based on what your goals are. What exactly do you want to accomplish? Do you want more revenue, fast growth, a new way of introducing customers to your product or service?
Understanding your business and your customers is key. Look at what you are offering or want to offer and set goals. These goals will help you determine what's right for your business.
How can Subscriptions Only Help?
At Subscriptions Only we live and breathe subscriptions and payment plans. Whether you are new to subscriptions or have been around the block we can bring fresh ideas and the infrastructure needed to help accomplish your goals.
If you're ready to take the next step give us a call at 865-458-4443 or visit our website