You may have noticed it with many cloud-based services today. They ask you to pay some amount monthly or annually. Also, it’s billed automatically at a specific date of every month or a specific month of every year. These so-called subscription services are becoming increasingly popular, and nearly everyone is following suit: Adobe with their Creative Cloud, Dropbox, Slack, Hootsuite, and many others.
So what’s the idea behind these subscription services? Why are they so popular and appealing? Also, why should you consider having your own?E I’ll give you three reasons why.
1. Recurring Revenues
Well, this is the most obvious thing. Collecting those monthly fees rakes in big money for those companies. The concept of “repeat purchases” is behind this method. The more people keep on buying the same thing from you, the more you can earn. Take a look at items in the grocers. Milk, cereal, meat, and other food items always have a tendency for repeat purchasing, because people need food all the time.
For software like Hootsuite, Dropbox, and Slack, they are actually online services. The value in paying for them monthly or yearly is that you’re paying for the services they offer, may it be online storage or company communication. You keep “repeat purchasing” every month or year because you need those services to run your business.
Same thing goes for the products you sell. You can turn some of your products into services, and you can then demand recurring billings for those services. Instead of the product being a one-time purchase, you turn it into a recurring revenue stream.
2. Easier on the budget
This especially applies for top-tier software like Adobe’s Creative Cloud apps. Before, purchasing just one Adobe program, like Photoshop, can set you back nearly a thousand pounds. But now, you can get all the Adobe apps for just £51 a month through a Creative Cloud subscription. That’s much more affordable than shelling out nearly £1000 for just one piece of software. In fact, even one year of the subscription is much cheaper, at just £612. Again, you get all the Adobe apps for this price.
Also, if you no longer need the software, you can simply cancel your subscription. Compare that to having spent so much money on individual Adobe apps and realising you no longer need them after just a year or so.
If you’re offering a particularly good product for sale, you can turn it into a subscription service as well. Instead of offering it for a very high price, which not many people can likely afford, turn the pricing into a monthly plan. More people will want to avail of it that way.
3. Full access to support and updates
Part of these subscription services is getting all updates to your software as they are released. There’s no need to pay any extra for those updates. Additionally, you can contact the company’s support lines easily if you encounter problems. Again, that’s included in the price you pay monthly; no hidden charges for that one.
These days, software can change so fast that you could be left out if you don’t have the latest updates immediately. Getting timely updates without any hitch is as important as it gets, especially for business-related software. And support lines are equally important, because not everyone can know everything about the software. Chances are someone will have trouble making it work. It’s the company’s job to help them.
Same goes for your products. If you decide to offer them as subscription services, make sure you push out regular updates and allow your customers to reach out to you should they have problems.
And those are the benefits of having a subscription service, both to customers and to your business. Have you thought of a product you can turn into something like this? It’s a great income stream, so don’t miss the opportunity!
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