Not too long ago, software was almost always sold as a piece of software you purchased at a store and installed on your computer to run. Today almost all software is sold as a subscription service on the cloud.
It hasn’t stopped with software, everything is now available as a subscription service.
In the month of April 2017, subscription company websites had about 37 million visitors. Since 2014, that number has grown by over 800%.
If you are a business owner you should look at moving to this model or risk losing out on major benefits that can be gained from selling your services as subscriptions.
The Subscription model gives you more predictable income, more value out of your customers, and more opportunities to upsell on premium packages.
Businesses who switch to a subscription model generally see three main benefits right away.
One of the biggest complaints of people trying to start service-based businesses is the unpredictability of income. They aren’t always sure when the next project will come and can go periods of time without making any money.
When they move to a subscription model, a lot of this instability goes away as you are guaranteed a certain amount each month. This is not only a great way to give yourself peace of mind but is also a good indicator of what your workload is going to look like at any given time, allowing you to allocate resources optimally.
You also stop chasing down clients to pay their invoices as the money gets deducted from their accounts automatically each month, putting payment responsibility on the customer’s shoulders instead of your own, saving you time.
When a customer subscribes to your service, you get an opportunity to show them your quality. One of the biggest barriers to people pulling the trigger on expensive services is trust, they do not trust they are going to get the value being promised to them. As a business selling cheap subscriptions, you can show your customers they can trust you with more expensive items by being given the opportunity to build great relationships with them.
A few tips on how to upsell customers while using a subscription model:
One of the best things about selling subscriptions is the amount of data you can utilize to make decisions. You can accurately gauge marketing efforts immediate through the number of subscribers gained as well as how your decisions impact the services you provide by looking at the churn rate.
The more information you arm yourself with the better decisions you will be able to make.
When using subscription data to make decisions:
If you want to sell subscription services but don’t know how to start,
Not everyone’s website will support the “ideal” set of features needed to start selling subscription services, be sure that you can get the following features for the best experience for both you and your potential customers.
If you don’t have all of these features with your current website, check out ServiceBot, a platform which makes selling subscription services extremely easy.
The first step to selling a service as a subscription is to design a “productized” version of your service. This boils down to coming up with a standardized package of features to be delivered each payment cycle.
This will give the customer a good idea of what will be delivered and will also keep your workload predictable due to having standardized the amount of work (eliminating scope creep)
Here are a couple of tips to keep in mind
Moving to a subscription model is good for your business by tapping into the growing subscription economy. It’s good for you by giving you a predictable revenue stream and workload. It’s also good for your customers, by giving them more control over how they spend money and gives them a chance to build trust with businesses before pulling the trigger on more expensive engagements.