What is a Subscription Economy?
This economy started when traditional companies started shifting from a pay-per-product model to a subscription business model.
Here companies give access to products and services for a recurring fee.
Image Source: Salesforce
Today it’s not about your products or services. It’s about what value people get by subscribing to your product/services.
A shift from Product-Focused to People-Focused. There is a shift in how companies view their product experience.
- Ownership has changed to Access
- Generalization has become customization
- Automating improvement
- Building relationships
- Responsiveness
Previously customers were happy with a generalized product but now people expect a software:
- that Fulfills their needs
- where Products are delivered instantly
- that solves a problem they are facing
It’s now all about creating an experience for the customer.
Subscription models are on the rise as companies are shifting to cloud service or Software as a Service (SaaS).
Source: UBS
The above graph shows how digital subscriptions are expected to more than double by 2025.
By creating personalized service for customers, businesses increase their value. This also builds long-lasting relationships.
Companies should bring constant improvement to their products and services by focusing on how people react and respond to their products and services.
Companies should automate relationship-building by collecting user information based on how they use the products and services.
Companies should shift strategies from transaction centric to relationship focused. This is sure to provide growth over time.
Understanding the customers and monetizing that understanding is how subscription businesses become a success.
Thus, embracing the changing subscription economy grows business and relationship with customers.
Focusing on user experience and responding to them through your releases, updates, value-based pricing, and support, can create predictable recurring revenue, value, and better customer relationship.
Image Source: UBS
U.S has the most subscriptions, i.e., 53% of the total digital subscriptions.
“Focus on the customer rather than focus on the product or transaction.” This will help you retain customers and grow your business.
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