One of the most successful business models of the 21st century has been the subscription model. Made popular by companies like Netflix and Hulu, the business model charges a consistent fee over the course of an agreed upon time frame (for example a fee of once a month). This model has been extremely helpful for small businesses offering niche services by helping companies “move capital expenditure over to operating expenditure” quickly.
According to The Guardian article, the reason for such high success rates is the customer return value. “The most valuable businesses grow by virality, that is, for every customer you pay to acquire, another one is referred. This kind of viral growth is closely linked to the happiness of your customers, so investing in your product to promote that happiness is absolutely crucial.”
The subscription model is a simple and lucrative one if done correctly. In order to grow subscribers, organizations must be clear on their product and service offerings. A few suggestions to make your subscription business successful include clear promotion of prices, different pricing packages, and discounts offered for longer-term commitments or upfront payments. These suggestions require thought, planning, and a connection to your customers.
Remember this is a business model and cannot replace good old fashion hard work and dedication.
