The subscription business model, once thought to be reserved for SaaS (software as a service) businesses and service-based brands, is now seeing massive adoption among various industries and sectors in the online world. This business model has seen a significant rise in popularity during the pandemic. It is proving to be cost-effective and extremely valuable for companies trying to expand and solidify their revenue streams in the post-pandemic world.
Simply put, subscription marketing — and the subscription business model — allows customers to get valuable products and services for a recurring fee. Usually, the subscription can be paused or canceled at any time. With a good product selection and a value-driven subscription strategy, businesses in many industries can take their revenue streams to the next level.
So, let’s take a look at some surprising industries that are currently turning to subscriptions to take businesses forward in the competitive global market.
You might not have thought about it before. Still, Ecommerce has long been a part of the subscription-based model, even though most online stores use subscriptions as a complementary service to supplement and strengthen their primary revenue model. Online stores will offer some form of monthly subscription box that customers can have delivered to their door for a recurring fee.
The company will then use customer data to create a personalized shopping experience and fill the subscription box with products and samples that are truly valuable and relevant to the individual. This personalized attention not only opens a new revenue stream but also boosts the overall brand experience.
Word travels fast about great Ecommerce subscriptions, so leaders in the industry have been bringing in new customers while retaining loyal brand advocates.
If you’re thinking of creating a subscription box for your Ecommerce business, make sure to:
- Segment your customer base
- Analyze customer data to identify key drivers, goals, and pain points
- Identify the most relevant products and product categories for different groups
- Conduct additional research and have customers fill out a questionnaire
- Invest in quality packaging and branding
- Monitor feedback to optimize your boxes and pricing, and minimize refunds and cancellations
The automotive industry is constantly innovating new solutions for car owners and buyers, not just in terms of the features their cars have, but how these features are used as well. Since the massive decline of private car ownership in 2018, the OEMs (original equipment manufacturers) have been focusing on developing subscription-based services and offers to fulfill the changing needs of the modern car owner.
That is why OEMs and dealerships now offer car subscription services like insurance, maintenance, roadside assistance, and various car features for a monthly fee. But of course, vehicle manufacturers are also starting to include the vehicle itself as a part of the subscription model.
Audi, Jaguar, BMW, Volvo, and others have already included some form of subscription into their business model to generate more revenue and get vehicles off the showroom floor in an increasingly anti-car world. Given the fact that car ownership is declining in urbanized centers with efficient transportation alternatives, manufacturers need to leverage subscriptions to keep moving their products.
Air travel has surged since the COVID-19 restrictions started to fade and countries started to lift their travel bans. Now that global travel is back in full swing and airports and airlines are more crowded than ever, airline companies have an opportunity to capitalize on the subscription model while delivering something of value to their customers.
Given the fact that airlines are dealing with thousands of customers every day, processing all of the information typically requires a cloud-based ERP (enterprise resource planning) system to ensure the efficacy and optimization of a subscription business model. With so much customer data to sift through, manually creating and optimizing a subscription service would be time-consuming and would waste financial resources.
However, with proper tools and data aggregation software, airlines can identify the services, products, and special features they can include in a subscription that would actually sell. We are also seeing a rise in subscription-based airlines like Surf Air and FlyLine. The former offers customers unlimited travel on their private planes for a monthly fee, while the latter focuses on lowering ticket costs for customers.
During the pandemic, the fitness world was going through a crisis. Gyms and fitness centers were closed and people were forced to either work out at home or not work out at all for the most part. While outdoor fitness saw a rise during that time, it was still hindered by frequent lockdowns.
The consumers suffered as a result, but so did the professional side of the fitness industry. Many professionals started using an app for personal trainers that allowed them to keep training clients virtually. Now that the pandemic is over, however, at-home fitness is still rising in popularity, and subscription-based apps are seeing widespread adoption.
Personal trainers can now do their jobs virtually and support their clients on their fitness journeys without forcing them to the gym. This saves time and money for the clients while delivering results. At the same time, it allows the professionals in the industry to diversify their offerings and establish new revenue models.
The modern business world becomes more competitive by the day, but that doesn't just mean that companies are competing for customers — it also means that they are competing for talent. Many modern employees have no problem job-hopping for various personal and professional reasons, changing employers until they find the ideal fit for their long-term needs and aspirations.
Only employers that truly know how to invest in the health, happiness, and professional development of their employees retain top talent over the long term. That means that employers need to provide ample opportunity for employee education and the advancement of specific skills.
This not only benefits the employee but also the company if it is to retain a competitive edge. Needless to say, this has given rise to specialized online subscription services — Codecademy, for example, offers professional development for aspiring and established programmers for a monthly fee.
You can find these types of providers in almost any industry in the world nowadays, allowing professionals from all backgrounds to keep learning new skills and retain their value in a fast-paced and ever-changing job market.
The gaming industry comprises many different types of businesses, including hardware manufacturers, software manufacturers and providers, game development studios, and, as of a few years ago, cloud gaming providers. All of these businesses currently employ some form of the subscription-based model, intending to provide valuable recurring services to their customers and generate higher revenue.
From hardware manufacturers that allow you to get new PC components at a lower price, to cloud gaming providers that give you access to new games every month, the possibilities for subscriptions in the gaming industry are endless. Additionally, subscription models are on the rise for mobile games, in which customers can get access to exclusive in-game perks, items, and features for a monthly fee.
While the potential for monetization here is big, business leaders in the gaming industry need to be wary of potential consumer backlash. Leaders need to optimize their subscription models to deliver real value to players for a fair and minimal viable price.
In the real estate sector, landlords and homeowners nowadays have an option to choose a subscription-based service for comprehensive home maintenance. While property management companies are not new here, subscription-based super-as-a-service companies are bringing real innovation to the industry.
Companies like Super provide property owners — or anyone who needs a super — complete property management services for a monthly fee, which includes covering the costs of repairs for various amenities and features. Whether it’s a broken pipe or a broken refrigerator, your subscription guarantees that the provider will take care of the repairs, allowing you to offset hundreds and sometimes thousands of dollars in repair costs.
Over to you
The subscription business model is changing the business world, and it seems that customers across industries and sectors are welcoming the change. Whether or not you operate in one of the industries we’ve discussed, consider following the examples in these sectors to kick-start your own subscription-based models.
A subscription model could be a supplementary revenue stream and a complementary service to your primary revenue source, but it may also be the transformation your business needs to establish its competitive edge in the post-pandemic world.