Tevin Ferreira 
Companies centered on subscriptions are those that survive on repeat customers. Whether that churn is voluntary or involuntary due to old credit cards or a change of address, these firms are all about retention rather than growth.
Customers can reduce costs by automating billing and instead focus on developing new products for customers via quote-to-cash platform – reducing the acquisition cost and growing the market.
Streaming
Subscription business models are ideal for businesses with a lot of repurchasing potential, such as software applications like Netflix or Spotify, or replenishment products like shaving razors (Dollar Shave Club), cleaning supplies (The Honest Company), or cosmetics and skincare products (OLLY and Tula Skincare).
Subscriptions provide businesses regular revenue; users pay regularly and engage with brands because they’re personalized, convenient, and valuable subscribers. In subscription businesses, you will often find companies that offer customers individual accounts through which they can access their subscriptions in more convenient ways like logging in, changing payment details, temporarily/cancelling or switching subscription plans. It is important to have a good payments platform that will make subscriptions work well like having an automated CPQ platform and payment gateway that will let you onboard as quickly as possible.
Software
Subscription-based businesses have already become the rage, however, it’s still a great tool to establish customer connections, maintain them and maximize profit.
These can be “freemium” services that are sold at prepaid cost (trial memberships, for example) or recurring monthly subscriptions (a popular type employed by Salesforce, Adobe, HubSpot and Slack).
Subscription businesses offer businesses regular revenue but if they’re going to work they’ll have to provide something that consumers want and need on a regular basis. Customers are loyal only if the value they receive exceeds customer churn and satisfaction levels, which can only happen by keeping customer service staff aware of the customer’s changing needs and being able to respond to customers’ changing needs by launching new value-creating products or services.
Subscriptions
The subscriber models are becoming increasingly popular across sectors, offering companies innovative ways to build customer loyalty. Old transactional businesses can shift to subscription revenue by providing a physical or digital item along with their offerings.
Subscribers to a product or service will need to commit to pay monthly, weekly, or even annually for continued access. Payments can be automated using an account management system to track this billing; subscribers also receive an account so they can check payments and upgrade plan levels.
Repeating revenue allows businesses to receive better liquidity and scale easier, with reduced upfront investments as well as a longer customer lifetime value. Furthermore, this model gives brands a chance for up-sells and cross-sells to provide additional revenue and loyalty points – which ultimately leads to its continued rise within the subscription economy.
Revenue
Subscription models can be added to existing businesses or introduced as a starting point for a new one, and they’re a cost effective way to increase customer retention, create longer-term relationships, and CLV. But these arrangements also have problems, subscriber churn might be a problem of renewal burnout, contract dislike or abandonment.
Price strategy is most important for subscription business. Too high – would dislodge customers or lose you money; to low – would make you look weaker and less effective in sales.
If you don’t want to fall into this trap, your software should offer you accurate, timely subscription revenue metrics. You will be better equipped to understand CAC and churn rates, allowing you to optimize your profit and reduce cash usage — two key strategies for every successful company.
