In recent years, subscription-based businesses have seen significant growth. By 2016 the market increased from $56 million in 2008 to a whopping $2.6 billion in revenue and continues to grow year over year. From Amazon to Blue Apron, subscription-based services have streamlined the process of shopping for consumer goods and services. Odds are you yourself utilize a monthly subscription service on a weekly if not daily basis.
With that said, there’s never been a better time to start a subscription service to capitalize on your customer relationships. As a business owner transitioning your retail, food and beverage, or even professional business to a subscription-style service may sound extensive and complex, but it’s actually quite simple. A subscription service provides an array of benefits to your customers as well as your business. Let’s look at some of the benefits of transitioning your business to a subscription-based service.
Convenience Pays Off with Subscription Based Service
Done right adding a subscription service to your business model can be a powerful tool providing consistent growth in direct consumer revenue. Adding a subscription-based service can be as simple as adding the right billing system needed to support it.
One major selling point of transitioning your business to subscription-based is the convenience provided to your customers. Trips to the store are no longer necessary saving your customers time and energy by having their products or services delivered to their door. Paying a flat monthly fee also helps customers stay on budget.
How to Add a Subscription Service to your Business
A rise in consumer interest in subscription-style services provides opportunities for small and medium-sized businesses to adjust and generate customer-centric recurring revenue. When combined with tiered pricing options, great customer service, and a great overall onboarding journey, your acquisition numbers will increase over time.
Restaurant Subscription Services
Meal kit delivery services like Blue Apron and Hello Fresh have capitalized on their direct-to-consumer business model by offering add ons to their customers as well as customized options for their vegan, paleo, and gluten-free customers. Food and Beverage businesses can follow suit by offering take-home build-a-meal and custom craft cocktail kits.
Retail Business Subscription Services
Stitch Fix, an online personal styling service is a subscription-based online retail store in the United States. It uses recommendation algorithms and data science to personalize clothing items based on size, budget, and style. Your retail store can emulate this service by providing personalized styling and delivery by adding an eCommerce shopping cart to your store website.
Professional Business Subscription Services
Incorporating a subscription option for your professional service business can produce an enormous payoff as well. Instead of signing project agreements or monthly retainers with a detailed scope, try offering your services under a flat-fee subscription. This may sound counterintuitive however it has proven to provide flexibility, ability to scale, and stronger customer relationships. Stax is an example of a professional subscription-based service.
Benefits of Recurring Payments and Subscription Services
Losing revenue because your subscription billing system isn’t reliable is clearly bad for business. Providing your customers with an easy-to-use recurring payment option streamlines the process.
As important as your customer’s experience is, switching to a subscription-based model has its own set of benefits for your business. The value of a subscription provides the added ability to predict revenue through recurring sales. This consistency in revenue also allows your subscription-based business to easily calculate the lifetime value of a customer, manage inventory, offer simple pricing, and many other professional service business benefits.
With the addition of subscription-based services, your business needs a payment software that provides flexibility to add recurring payments as well as additional payment capabilities to your business. Set up recurring payments with the Stax Platform. Store customer profiles to automatically capture future transactions. Stax also updates expired credit cards for you so you’ll never miss a payment.
Our platform is a smart solution for businesses that take payments online or over the phone. With simple invoicing, recurring charges, and online bill pay, you’ll get paid faster with Stax. Request a custom quote to learn more about how our integrated payment solutions can help your business transition to a subscription business model.