Benefits Of Subscription Based eCommerce Model

Benefits Of Subscription Based eCommerce Model

There was a time when platforms such as Netflix or Amazon Prime would come to your mind on hearing the term “subscription-based ecommerce model.” Well, not anymore. Today, people have subscribed to a vast amount of online products & services that include grocery supplies, clothing, cosmetics, medicines, etc. This clearly indicates that subscription-based online business models have certainly been a hit.

This surge in the adoption of subscription-based e-commerce has been clearly driven by the convenience it offers to customers. They have no problem spending money on something they need and something that they’ve become accustomed to.

On the business side, this subscription-based approach can be advantageous in many ways for online businesses. But it is important to select an expert angular js development company that can help you bring your ideas into reality by leveraging the latest technologies.

Benefits of Subscription-Based E-Commerce Model

Consistent Revenue Stream:

One of the most obvious yet one most important benefits of having a subscription-based business is consistent cash flow. Every business – whether online or offline – want to have a consistent flow of cash, and they’re on the constant lookout to find out ways for it.

For online businesses, the subscription approach can be a key tool in creating a loyal customer base and generating consistent revenue. This approach increases the overall stability of your business and you can have better cash flow management as you’re aware of the fixed revenue.

Better Inventory Management:

If you’re into the e-commerce space, you know how stressful inventory management sometimes can be. And if not planned and/or implemented properly, inventory management can hurt your business in the short as well as in the long term. But because you have the idea about the orders from customers who have subscribed, it can greatly relieve you from all the hiccups and bumps coming your way

Increased Customer Retention & Relationship Management:

Every business wants to build a loyal customer base. Do you know why? Because it’s a lot easier to retain an existing customer than to find a new one. In form of the subscription model, online business has a golden opportunity to retain their customers. Not only that, it eases the path of customer relationship management as you know the current status of all the customers who’ve subscribed.

Better Decision Making:

We are the result of the decisions that we take, and so are our businesses. Whether it’s deciding the annual budget, hiring people, deciding to spend, expanding of business, or hundreds of such decisions, every business has to take these decisions quite frequently.

Many times we don’t take the right decisions as we don’t have the right data on our hands. With a subscription-based approach, we have many forms of data such as cash flow, types of customers, product popularity, etc. Such data helps you forecast things better and take better decisions.

Greater Company Value:

What’s the first thing most investors ask when presented with an investment opportunity in a company? They ask for the valuation of the company, right? When you have a consistent cash flow in your business, you can proudly tell them about your company’s earning capacity and that adds significant value to your company. This not only increases your chances of getting an investment but also helps you establish a reputation as a solid company.

Regular Customer Engagement:

There’s only one kind of customer who subscribes to your business, and that’s the happy type of customer. It’s great to have happy customers but this puts two responsibilities on your shoulders. The first is to make them stay happy and the second is to make them even happier.

The subscription-based model gives you the opportunity to interact with your customers on a regular basis and improve the relationship. Hire expert ecommerce designers who would help you serve the purpose of offering the best user experience.

You can engage with them by taking their feedback, keeping them updated about your offerings, having a conversation with them about a cause, surprising them with some kind of gift, etc. There are tons of ways to improve customer relationships if you’re truly willing to.

Proper Allocation of Marketing Efforts & Resources:

As you know, there are many stages before and after one becomes your customer. And as it’s the case with all businesses, you must be fighting on all fronts. But if you have a base of customers that have already subscribed to your product or services, you don’t need to convince them anymore. Instead, you could focus on nurturing relationships with those customers and focus on acquiring new customers. This will help your business grow on a consistent basis and will help immensely in the long run.

Ease for the Customers:

The main reason why customers opt for subscriptions is that they want to get rid of all the hassles involved in ordering, coordination, and delivery. With the subscription-based model, they don’t have to go through it. On your side, this will ease the burdens on your customer support department as there’ll be lesser complaints.

Opportunity to Upsell:

As we saw earlier, only happy customers will the subscribers of your business. You could use this as an opportunity to pitch your premium plans/services to them as they’re already satisfied with your business. You could offer these services in form of trials and the ones who like them can purchase them.

Long-Term Customer Relationship:

We, humans, are funny animals. Sometimes, we take all the time in the world to form a habit and sometimes we form it without being aware of it. However, one common thing in both types of habits is that they’re a lot harder to break. So if you could convince ten thousand customers to subscribe, you can stay relaxed as most of them will stay your customers for a long time, simply because they’re habituated to it.

Final Word

Subscriber-based businesses and their benefits sound great on paper, and they are. However, building a business on such a model is a difficult task at first as you’re asking your customers to trust you with their money and financial information.

This can only happen by winning their trust. We once knew a company that wanted to enable subscriptions on their website and wanted to hire Magento 2 developer, but that didn’t work out well as they hadn’t won the trust of their customers.

Therefore, rather than focusing on a subscription model, first, you should think about giving the best user experience. Once you’re confident enough, you could hire an ecommerce website design and development services provider to enable your site for the subscription-based model.


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