Back in the day, consumers only took out subscriptions for things like newspapers, the gym or cable TV.
But nowadays, it seems like you can sign up for any kind of product or service imaginable, from grooming products and music streaming, to food and cleaning services. Indeed, research shows that the subscription economy grew by a staggering 350% between 2012 and 2019.
Subscription models not only offer consumers a convenient, low-cost way of buying what they want and need, but they help businesses retain customers too.
Rather than simply hoping people will purchase their product or use their service again, a subscription model allows companies to keep their customers on a long-term basis. This also gives businesses a more reliable and consistent revenue stream.
As such, adopting a subscription model could be a smart move for your own business. If this is something you’re considering, you’ll need to decide which subscription business model to use. Each one is suited to different types of company, so your choice will depend on what your business does.
The subscription box model
Around 54% of consumers have signed up for at least one subscription box service, and the industry itself is worth around $10 billion. What’s inside these boxes is typically either pre-selected by subscribers or curated by the brand after learning their customer’s preferences.
Some brands that deliver pre-selected boxes include The Dollar Shave Club, which provides razors and other personal grooming products, and Blue Apron, which delivers the recipes and ingredients customers need to make certain meals. An example of a brand that curates personalised subscription boxes is The Cheese Geek, who send subscribers a monthly selection of 4-5 different kinds of cheese. These are based on preferences, which can be dietary (ie: vegetarian options) or preferential (soft or hard cheeses).
A subscription box model makes sense for businesses who provide customers with a physical product that can be delivered on a recurring basis—though information-based companies aren’t necessarily precluded from offering them either. For instance, if you’re in the business of coaching people, you could deliver boxes with books and productivity tools that help them learn, while fashion bloggers could deliver subscribers their favourite accessories of the month.
The members-only model
For industry experts offering useful insights, a member-based subscription model could be the way forward. Say you regularly post educational content on your website—such as how to DJ, coding advice, or investment tips. You can easily monetise this information by putting it behind a paywall and encouraging people to subscribe to your business to gain access.
This not only helps you boost your revenue, but allows you to create an online community for your most loyal customers. A similar concept is a subscribers-only model, where you still post most of your content for free but give subscribers access to premium content, such as exclusive videos, personal Q&A sessions, or a member’s area.
Take member-based subscription model company Cook Smarts, which offers subscribers a six-week online cooking course. While members can access the first three lessons for free, they have to pay to complete the whole course.
One example of a subscribers-only model is Skillshare, who offer online classes on a whole host of topics, from art and marketing to entrepreneurship and photography. While there are many free videos on the site, premium subscribers gain access to thousands more classes, as well as bonuses like teacher support, no adverts, and perks like offers on the brand’s favourite software.
The “keep them engaged” model
If your company only has limited interactions with its customers, then introducing a “keep them engaged” subscription model could prove a savvy move.
This works as a supplementary source of income to your core business activities and encourages your customers to interact with your brand outside of their regular use of your products or services.
Say you sell musical equipment, for instance, you could launch tutorials to help amateur musicians learn to play, as guitar manufacturers Fender have done to great success.
This type of subscription business model also works particularly well for seasonal companies and events organisers. Take yoga festival Wanderlust, which launched an online content platform called Wanderlust TV featuring yoga lessons from professional instructors.
This has allowed them to better engage with fans in between events. The platform acts as a gateway to Wanderlust’s core services, by giving people a taste of the brand and getting them interested in the run-up to the next festival.
