Subscription sales at a glance
Among the advantages of the subscription model from the customer’s perspective are the low monthly (usually) fees. Compared to having to pay – for example – for an annual software license, they can be much more beneficial. What’s more, using a subscription allows payments to be properly broken down into smaller parts… but not installments. After all, a key feature of subscription shopping is that it does not involve a contract, does not require verification of earnings, and does not generate interest.
Automatic payments, on the other hand, are responsible for convenience. A one-time connection of the card allows the service provider to draw the corresponding amount from the customer’s account every month. Thus, the recipient of the service is not unnecessarily burdened with the need to renew payments, and at the same time the seller benefits. After all, it is easy to forget about disconnecting the card, and to justify incurring small expenses.
Almost everything is sold in the subscription model these days. Here are some examples:
- Access to audiovisual services (streaming platforms, e-book libraries),
- Food and meals (including boxed diets),
- services used periodically,
- products published regularly (paper press, books, games, music),
- Applications and tools (hosting, software),
- Access to platforms with online courses,
Types of subscriptions
Subscriptions with digital products
This group will include:
- Access to streaming platforms (Netflix, Max, Spotify, Tidal),
- online courses,
- Access to e-book libraries,
- repositories containing scientific articles,
- software,
- marketing and sales tools.
As part of a digital product subscription, customers can expect regular updates, technical support, as well as development (especially important for software purchases).
Subscriptions with physical products
This group should include:
- Subscriptions with replenishment – supplies of products such as food, cosmetics, medicines, pet food,
- subscriptions,
- boxes containing products from a particular category – food, cosmetics, children’s products, gadgets.
Membership subscriptions
This group includes:
- Access to platforms that offer online courses,
- Supporting subscriptions (Patreon, Patronite),
- Access to news portals and premium content (paywall).
Service subscriptions
This group will include services related to access to the competence of specialists, including:
- remote fitness sessions,
- medical services,
- automotive services.
Subscription from a customer and vendor perspective
Subscription sales have become popular in recent years for good reason. According to the report “Myths and Facts of Subscription Services,” prepared by Deloitte Digital, consumers value subscriptions because of:
- lower prices,
- A multitude of special offers and discounts (e.g., 12 months for the price of 10),
- free product return,
- free shipping,
- No ads (in multimedia services).
Vendors will notice different benefits in this model. Entrepreneurs note an increase in consumer loyalty using subscriptions. It’s also a model that offers many opportunities for expansion. You can attract customers with low prices, but to keep them you will need personalized solutions that will leave the competition behind.
Advantages of subscription payments for stores
So, are you still wondering what introducing a subscription will really do for your business? Here are some reasons why you should consider it for your store.
Fixed revenues you can predict
It won’t happen right away, but when you get a dozen, a few dozen, and finally a few hundred subscription-paying customers, you will provide your company with a steady flow of cash. With subscriptions, you can more easily plan your company’s future expenses.
Building customer loyalty
Subscriptions make customers more attached to a company. After all, when they decide to pay for a subscription, they assume that they will have a relationship with it for a long time. This is an opportunity for your company to win them over and keep them for longer.
Scale base
Scaling a business is an extremely important aspect of running a company. Subscriptions provide the foundation for a friendly and effective scaling model. With a steady revenue coming from subscribing customers, you will find it easier to plan the growth of your business and better prepare for an increase in the number of customers.
Lots of data
Regular customers are an inexhaustible source of valuable data. Their behavior on your store’s website, their reactions to your company’s next steps, their social media activity, and even the behavior that accompanies subscription cancellations will all provide your company with the data you need to learn how to use to optimize your processes.
Easier to use
It doesn’t apply to all areas, but the fact that subscription payments collect automatically, and that once a customer is acquired, he or she remains a customer until he or she decides to opt out, frees up a fair amount of capacity that your company would normally devote to processing payments and acquiring customers. This does not mean, however, that you can afford to let go. On the contrary, devote the freed up resources to improving customer service, increasing retention and lifetime value of customers.
How do you prepare to implement subscription sales in your store?
Although the subscription model is being used more and more, this does not mean that it will work for selling products in all categories. A lot also depends on your current target audience. So before you start:
- Create a specific promotional strategy,
- Determine how you will stand out from the competition,
- Construct an attractive launch offer,
- Ensure safety and convenience.
Promotional strategy
When wanting to introduce a new and interesting solution, you must first determine how you are going to tell people about it. You need to act in such a way as to reach both your existing customers and brand new people. Use all the knowledge you have about your target audience and plan promotional activities.
Inform about the possibility of purchasing your products or services by subscription:
- on social media (for example, creating a roll that you share on Facebook, Instagram, TikTok and other platforms),
- via broadcast channels,
- By sending a newsletter,
- message on the store’s home page,
- In the cards of the products included in the subscription purchase option.
In a word: make use of every space you have.
Beat the competition
Surely you already have a model – a company that has successfully implemented subscription sales, and now you want to repeat (and top!) its success. However, if such a reference point is still missing for you, scour the Internet for success stories. Get inspired, take full advantage of your competitors’ experience, but at the same time actively think about what you can do to give your customers something more.
Don’t do without estimating the costs that “rolling out” subscription sales will generate. Exercise creativity, but measure your strengths against your means. You don’t always have to beat your competitors on price. Instead, consider placing emphasis on other aspects of your offering. Perhaps the products you order are organically grown, or you support Polish entrepreneurs by ordering materials only from local companies? Or perhaps the content you offer by subscription is created by authorities in the field who are worth highlighting? Look for strengths and shed a lot of light on them.
Offer to start
It’s worth appreciating your subscribers. If you play it right, they are the ones who will generate a large part of your company’s revenue. So you need to properly encourage them to subscribe to your products or services. Tips used with loyalty programs can also be helpful. After all, you’re counting on subscribers to stay with your company for the long term.
What can you encourage customers with to get started?
- discounts (for example, in exchange for taking out a subscription for a longer period),
- free delivery and/or return,
- Prior access to products/services,
- a fixed discount on other products (e.g., increasing with each milestone reached in subscription length),
- contests with attractive prizes only for subscribers.
Safety and convenience
Customers often, before they decide to subscribe, check that they can unplug the card and cancel the service or the recurring delivery of products at any time without hindrance. This is extremely important and there is no point in making it difficult for them, as you will only discourage them.
Also make sure you are able to offer secure payments, have access to service technicians and meet all safety standards.
Also pay attention to whether your store supports card payments from different providers, as well as other forms of payment. BLIK, Apple Pay, Google Pay, PayPal – these are all options often considered by customers. The more you support them, the greater the chance that it is your company’s offering that consumers will choose.
Summary
Subscription sales are a convenient model – for both customers and sellers. To successfully sell subscriptions, you need to learn them, but it is a cost worth paying. Well-implemented subscriptions will allow your company to gain loyal customers who will provide a steady income. All you have to do is… take care of them and prepare for long-term top-notch customer service. And don’t forget to constantly develop your offer – your competitors have no intention of standing still.
