3 Trends to ramp-up your subscription business
Moving your business towards a recurring revenue model can be challenging and it’s a two-part process: implementing the subscription offering itself and ensuring that you can support the model from a technology perspective.
If you’ve traditionally sold your products or services outright, it can be difficult to navigate the pitfalls of trading ownership for experience. How do you safeguard your revenue with slow moving products or services? How do you manage customers who have enjoyed specific pricing discounts for many years? How do you manage the appeal of custom offers when you’re striving to standardise?
To gain the traction you need, we explore 3 key areas that can close the gap faster between outright ownership and subscription success.
You see this when you make Retail purchases daily: “buy-2-for-1”, “combo-special” or “buy-3-get-cheapest-free”. The concept of bundling has been hugely successful in the Retail space and there’s no reason for Subscription-based business not to take advantage of this as well. Bundling provides the perfect opportunity to boost slower performing products or services and to increase the overall subscription value. If you’re a niche player or a larger enterprise with many divisions, bundling also provides the opportunity to extend your offering to the benefit of the customer by including products or services from partners.
As more companies standardise their offerings, personal tailoring weighs heavily on both your existing customer base as well as being a competitive play for new business. Tiered approaches provide a mechanism to achieve a standardised approach which can further be tailored with add-ons or restrictions, depending on the customer’s base subscription. The key benefit which makes this approach so attractive for subscription businesses is the lowered risk associated with human error and the potential up-sell and cross-sell gains.
Whilst personalised pricing is not a headache for start-ups, it can be for companies moving toward subscription. Many established relationships have been nurtured with customers over the years, starting from an initial discounted engagement. When a company replaces their ERP, a common question usually includes: “Does your system offer Customer Trade Agreements or per-Customer Pricelists?”. Whether your price point is based on geographical location or customised toward long-standing customer relationships, it’s important that this element forms part of your strategic road map from outright ownership to subscription. In fact, many businesses today attribute a sizeable portion of their revenue to key accounts. Factor in your key accounts when planning your model.
In order to ramp-up your subscription business, customer-centricity and team enablement is part of the foundation which will determine how successful it will be. The core concept of subscription is already attractive to your customer. Now you need to make it irresistible with a high-value offering which enforces the customer’s belief that you are the right partner to help them achieve their goals.
Contact us here for a meaningful discussion about supportive technologies that drive subscription success.
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