• Mani Anand

Moving Towards A Subscription-Based Business Model



Subscription-based business models have grown significantly over the past few years. In fact, Forbes states that eCommerce-based businesses used this model and doubled their growth yearly from 2013 to 2018. Aside from its impressive revenue growth, it seems to be a burgeoning trend among consumers. For instance, many of them are going for media streaming services, like Spotify, Netflix, and Disney+. If you think your corporation is heading in this direction, use this article as your guide to learning more about it.


What Is a Subscription Revenue Model?


Subscription revenue models focus on continuous payments from customers to ensure ongoing access to products and services. They often require monthly or annual fees, and you can also opt for pay-per-use business models to enhance your revenue stream. However, take note that this model often operates on a customer-oriented drive, meaning your business’s reputation and credibility should be under constant scrutiny.

What Are the Different Types of Subscription Models Popular for Businesses?


Despite the prominence of subscription-based models across different industries, many still often go for the most traditional setup called the pure subscription model. It means your revenue is fixed and predetermined. You can increase it over time as you enhance the user experience and add more products or services, but doing so may push other users to look into your competitors. Thus, it may be wise to go for a consumption model, wherein the total usage is considered.


If you want to have a more flexible model for your operations and to take advantage of more technological innovations and customer relationship management tools, you can go for a hybrid subscription model, meaning you can offer both fixed and variable elements. However, you should be careful with using it since many users may easily get confused by the terms and conditions. Thus, ensure you build up your internal processes first before launching.


How Can I Transform My Current Business Model into a Subscription-Based One without Much Stress?


Transitioning from one business model to another can be challenging for anybody, no matter the industry or years of experience. Fortunately, you can find ways around this since some professionals have gone through rigorous training, trial-and-error, and relevant market research to perfect this sustainable business model. For your guidance, take note of the following tips:


1. Study other subscription-based providers and re-imagine it for your business

Because subscription-based revenue management and innovative businesses have been around for a while in recent years, it means you have the chance to study them, think about the possibilities in your current business’s offerings, and find ways to re-package them for your subscribers. Additionally, don’t forget to do informed market research to guide your efforts.

2. Link touchpoints through your new customer lifecycle

Shifting to subscriptions means you may have to re-win or entice former customers to get them interested in your offerings, whether they may be brand new or not. Therefore, you need to become more knowledgeable about the consumer journey and engagement rates to convert leads into revenue. Thus, look into tracking product usage and customer satisfaction by using state-of-the-art tools, like revenue cloud.


3 Steps to a Strong Subscription Strategy


The shift to subscription is not a single leap, but a journey of many steps, and you’ll need to think through three major components of your strategy: your products, customer lifecycle, and business capabilities.

1. Reimagine your products

Launching a subscription model is all about the products. Here’s how to make a subscription model work for your product strategy:

  • Product structure and pricing: Now’s the time to redefine your product structure, so you can consolidate your SKUs and enable dynamic pricing.

  • Product delivery: Next, you’ll need to rethink how you deliver products. In the self-service model, it’s especially important to provide your products for immediate and easy access and to be able to activate licenses automatically within the product.

  • Product usage monitoring: Finally, the hallmark of a successful subscription business is positive attrition, where customers add on more licenses and services month over month. To get there, you’ll need capabilities for usage monitoring, so you can understand how customers are using your product, and double down on what they use most.

2. Envision the new customer lifecycle

End-to-end Subscriptions change the entire lead-to-cash process, because now a customer doesn’t just represent a one-time sale, but a lifecycle from acquisition to renewal. Businesses making the shift will need to connect customer touchpoints into one holistic journey, something that requires new capabilities and new cross-functional partnerships.


3. Build new capabilities through technology

Now that you’ve mapped the connected value streams across the buyer’s journey, it’s time to identify the capability gaps that exist and how to address them with the right technology


The beautiful thing about a subscription model is that it orients the entire business around the customer. So why not extend the customer-first systems you already have in place, and take advantage of the full power of Salesforce?


How Salesforce CPQ & Billing Can Help


Salesforce CPQ & Billing was built from the ground up to support recurring customer relationships, on a unified platform that gives you the flexibility to evolve. The benefits of selling and billing on one platform are clear:

  • Close complex deals – fast: Create a scalable sales process with guided selling, advanced approvals, and quote generation.

  • Automate the customer lifecycle: We provide workflows for contract amendments, prorations, invoicing, and renewals.

  • Unify sales and finance: We provide complete visibility across the customer lifecycle, with accurate data all in one place, so you can make informed decisions.


Due to the popularity of subscriptions across different niches, your business may benefit greatly from a much-needed shift. Now, you have an informed outlook on the possibilities of applying this renewable model to your current operations. Just ensure you have the necessary tools and professionals to make that seamless transition.


Are you looking for a Salesforce Consulting Partner to reinvent your business’s current model? Connect with team Apphienz. We can provide you with technological interventions, such as Salesforce Implementations, Business Transformation, On-demand Admin, Salesforce training and Salesforce Managed services, to enable you and your team’s workflow and meet new market demands. Simplify your process through our interventions today!

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