Subscription Business Models & Its Impact On Brands

A subscription-based pricing model is a payment system that enables consumers to pay for goods and services before consuming them. This can benefit the individual or organization by providing an opportunity to make money from consumable products which would otherwise be sold at low margins.


The subscription model has proven to be the most efficient at keeping customers happy. Digital subscriptions rely on an easy-to-access software platform that may be used from any device, regardless of location. Most often, payments are made quicker and smoother than in other models.


It can be easy to forget about a single purchase and fall out of the habit of using it, but subscriptions keep consumers engaged and continue to receive value from their service. Instead of static, one-time resources, subscription learning services are more likely to be updated regularly.


Establishing a marketing plan at the onset is vital when starting any business. Identifying customer wants and needs is essential so that future marketing or advertising efforts are focused, which increases the odds of success.


Subscription Business Model Types


Access to premium content for dedicated subscribers: This category includes websites that offer many free videos and courses in education or any industry that wants to transform people. It ensures the best expert advice, which an individual cannot obtain for free, and tremendous success.


Membership website: This model is becoming more popular in the information age. They are focused on only one theme when forming a community where a person can get a membership and learn the specific skills, where they can learn, discuss, and teach the required skills. 


Model Of Subscription Boxes: Getting your product or great idea to your customer’s door.


The Netflix Business Model: This is highly beneficial to video creators. It enables our customers to access our services from any location. We offer on-demand videos to our subscribers. This model is best suited to the following applications: e-learning, entertainment, and fitness.


The mastermind model is for those more committed to change if the company provides fitness, financial, or other transformation services.


The following are the fundamental characteristics of the model:

  • Allow access to you as an individual.
  • Maintain regular check-ins or meetings.
  • Work together for a set period
  • Have a clear goal and commitment
  • It ensures a high level of accountability.
  • Have both group and personal advantages.


Advantages Of A Subscription-Based Model:


Accurate Demand Forecasting: Knowing how many customers you have makes it much easier to predict how much inventory you’ll need for a monthly subscription box or replenishment service. This reduces excess inventory, resulting in high storage costs and potentially finished goods. Additionally, recurring revenue provides consistent cash flow, allowing you to reinvest in your marketing and customer experience management efforts confidently.


Understanding Customer Behavior: Because recurring subscription plans regularly keep customers in touch with your company, there’s plenty of opportunity to collect data across multiple touchpoints to understand better what they want. These initiatives, whether in the form of user feedback or customization tests, help to improve customer relationships and refine your value proposition.


Reduced Customer Retention: Customer retention may be prohibitively expensive when a company relies on one-time sales to generate income. Every time a customer makes a purchase, you should invest in email marketing, social outreach, and retargeting ads to entice them back for another sales cycle. When a new customer signs up for a subscription plan, it is much easier to track sales.


Drawbacks of a subscription-based model:


High Competition: As we mentioned in our section on “the subscription economy,” the subscription business is rapidly expanding. This means newcomers will face an uphill battle in becoming acquainted with their target audience and preventing existing customers from defecting to a competitor.


Complex Operations: Subscription box services can be challenging to set up, especially those with hand-selected content. It necessitates a high SKU complexity and a labour-intensive packing process, which add significant time to order fulfilment. If your company has supply chain issues, it could easily disrupt an entire subscription cycle and force substitutes that do not meet your customers’ needs, causing dissatisfaction.


Subscription Fees: While every subscription is exciting and engaging at first, tiredness and boredom can quickly set in once the service’s novelty wears off. You’re looking at a high churn rate, making developing continuous, recurring revenue difficult until you find innovative ways to continue providing value and pleasing customers.

Read About Faisal Abidi



About Faisal Abidi

Faisal Abidi is a serial entrepreneur and the Director and Co-Founder of RNF Technologies,which offers creative tech solutions and digital products to its 250+ clients across the globe. The company helps businesses grow with its web/mobile app development, online marketing, and gaming app development solutions.

Having worked at Google and British Telecom before starting his own venture, Faisal brings more than 12 years of experience in the tech services sector to his role as a Co-Founder. He has helped several brands become industry leaders with his knowledge of different verticals and marketing trends.

Faisal has also been a TEDx speaker and several media publications have covered his tech-driven ventures. In addition to leading RNF Technologies in an advisory capacity, he is the Founder of Resourcifi, which provides 360° IT staffing solutions.

  • Facebbok