The Value of Subscription-Based Services 

January 19, 2017

Subscription services as a business concept are not new, but it’s taken on some new and exciting formats. Businesses such as Ipsy, Treatsie, and Graze are known for using subscription services to deliver monthly, bi-monthly, or regular boxes of goods, curated and directly to a mailbox. Other services, like the New York Times, offer access to a website or a service for a low, weekly fee that users pay upfront. As intimidating as it may be to commit to paying a monthly fee for a service, any service, there is a value to this recurring service that you might want to consider!

What Does Subscription Mean For You?

Subscription services relate to the rising trend of consumers seeking hassle-free, simpler shopping experiences. How do subscription services take care of both the need of the business and the need of the consumer? For consumers, there’s the consistent value, by both ensuring that there’s no lapse of access to products and bundling services, as well as keeping prices down across the board.

Additional benefits of subscription-based services:

  1. Providing a wider range of services and deliverables than a company would have been able to on a per-item or per-bundle basis.
  2. Resources will always be available when a customer needs them, over and over again.
  3. When a need is recurring, keeping everything monthly prevents any surprising costs and gives the need to up or downgrade as needed.
  4. Builds a stronger relationship with between the person providing the subscription and the clients paying for them since there needs to be a constant appeal to maintain the service.
  5. The price of what would otherwise need to be purchased on its own is made more accessible since it’s broken down into smaller costs.
  6. Forces the business with the subscription to continuously improve their product offerings for those in the service, to ensure they remain loyal.
  7. Aligns the business with the customer more and more, since the business will need to respond to what customers want to align their business interests.

Depending on the type of business you have, you might want to consider whether or not offering a subscription service can work to your advantage! Some different examples are:

  • Fixed set of goods (ex. One copy of a newspaper)
  • Unlimited use of a service or services
  • Pay-as-you-go, to purchase a product periodically
  • Basic access with additional charges depending on usage
  • Freemium, offering one-tier for free, and others for increased costs

There are more and more reasons that businesses are seeking to build ongoing relationships with their customers. Obviously, any small business wants repeat business and positive word of mouth, but there’s a different interaction that comes with subscription services over others. There’s the general feeling that a business might promise big to hook a customer, but then drop the ball once a transaction has been made. This is removed with the subscription service.

Have you used any subscription based products? What have you liked or disliked about them?