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Why Are More Businesses Turning to Subscription Models?

More and more businesses are turning to a subscription payment model. The Harvard Business review estimates that the sector has been growing at an average rate or 200% per annum for the last 5 years. From the health to the automotive industries, more and more businesses are implementing recurring payment systems. It's no surprise why, subscription-based businesses benefit and gain an advantage is a wide variety of areas that regular businesses don't.


Convenience is a key determining factor in the purchasing behaviour for a lot of consumers. The automatic renewal feature for consumers allows them to always have your product or service without the hassle of going out and purchasing it. This element is especially relevant to consumable or service offerings. Since consumers don't have to visit the store, there saving time and energy. Alongside this, regular deliveries of a product or service have been linked to increased consumer loyalty over long periods of time.


For customers, a subscription offering that has numerous different packages allows for easy scaling, either up or down. With any other subscription, like a phone service, for example, changing the terms can be tricky and time-consuming. With online subscription services, however, it can be done in minutes, without needing to contact the company.

For Businesses, offering your products on a subscription model allows you to scale depending on the additional value you want to give to the client. A subscription service allows you to segment your clients into which package they purchase, from this you can tailor your marketing and promotion activities to best meet the needs of that specific client group.

Strong Relationships

A subscription-based model means that you and a consumer aren't working together for just one project, it requires an understanding that you are both in it together for the long term. As a result, businesses have the opportunity to build strong relations with consumers, there are a wide variety of benefits from doing this. Stronger word of mouth promotion, higher consumer loyalty and better brand reputation to name a few.

Cash Flow

Poor cash flow is the reason many businesses close down. Incorporating a subscription model into one of your revenue streams allows for a highly predictable revenue stream in that area. Predictability can be a burden for many companies, with proper information, you can easily draw up sound investment plans for the future. Predictable cash flow allows you to make the most of your assets, alongside this, consistent cash flows and guaranteed revenue could give your business a higher valuation.

*In today's subscription market, almost any and every product category has some form of subscription element. Whether business to business or business to consumer, the subscription model is growing and is here to stay. No matter what type of business you operate, consider a subscription model, why not give it a try? Use the subscription website builder to build your own subscription service.