Every Business Can Stream Recurring Revenue

From entertainment to education, health to sports, and transportation to utilities—a large number of consumers worldwide have adopted the trend to subscribe to subscription services that give them instant and cheaper access to the products and services they need or they want. These subscriptions have made it easy and convenient for the consumers to keep their supplies available for them whenever they need them.

According to Robbie Kellman Baxter, a strategy consultant, subscriptions are not about newspapers or streaming services, businesses from retail to manufacturing and transportation to health and education, all can earn consistent recurring revenue while developing customer loyalty.

Today, people begin their days with Google, Alexa, or Siri for morning news while taking advantage of their kitchen full of the subscribed groceries or meal kits available at their kitchen without putting extra effort to buy them. They travel to their connected business places and coordinate over subscription-based cloud services using smart gadgets and navigations subscriptions to several SaaS bundle services.

Also Read: All You Need to Know About the Subscription-Video-On-Demand (SVOD) and Its Way to Lead the Subscription Market

This article argues how every business has the opportunity to make more recurring revenue while switching to the subscription business model and overviews some of the industries that have already in one way or another have adopted the subscription model and are taking advantage of the ripple effect of the growing subscription market:

Changing Customer Behaviors and the Need for the Subscription Model

Changing consumer behaviors and the advancement in technology at a breakneck speed are the core reasons for the success of the subscription economy and are challenging the survival of other business models.

Furthermore, the pandemic has exposed the vulnerability of the current business models in the connected future of tomorrow. In some industries, the brand switch has emerged as the Post-COVID threat to businesses due to the inability and insufficiency to meet customer expectations. On the other hand, some industries have shown their strength with their ability to retain customers and gain more customer loyalty.

Businesses that could not keep up with the losses and setbacks, pandemic incurred, have lost their customer base and the revenue sources are mostly the businesses with the upfront or one-time purchase revenue model.

In contrast, the recurring revenue businesses remained stable, predictable, and flexible to offer customers what they want, and based on their reliable data-driven business strategies, they have taken more customers on-board, too.

Tomorrow will be the age of remote work, self-service, and dynamic business trends. Business models everywhere across the industries are not enough stable, flexible, and scalable to deal with the inexorable market demands and customer expectations on their way.

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Businesses will soon lose their credibility and eventually customers when they would not be able to meet customer expectations.

Also Read: Subscription Rundles—The Future of Subscription Business Is Here…

Why It is the Time to Consider Switching to the Subscription Business Model

Even the most established and stable businesses are prone to economic crisis. After every 8 to 10 years, a new wave of recession or economic stability downturns the revenue goals of businesses and tremors the market, in every sector.

Companies need some solutions that can keep them stable during rainy days. The subscription model gained more popularity and adaptability after the pandemic hit the businesses and their operations all over the world.

The organizations realize the value of the recurring revenue streaming and the stability it gives to the company in hard times. Switching to the subscription business is characterized by the following core needs to keep every business breathing, surviving, and thriving.

Predictability

Two attractions of the subscription businesses are the recurring revenue and the larger customer base. These two factors are also the catalysts that drive predictability in any subscription-based business and help businesses to meet the demand and supply conditions in any market while managing their operational costs.

The opportunity of data-driven far-sightedness is also helpful for the subscription businesses to hunt opportunities to grow business in different directions and extend enthusiastically.

Scalability

Businesses have to scale their customer base, services, and business size with time. However, the dynamics of the market could be the major frictions or the facilitators to channel the factors that help businesses to scale.

With the subscription model, the businesses have always the opportunity to extend their operations while introducing new services on a recurring basis. These can be incorporated to boost a flagship product or as a subsidiary of an already existing service or product.

The subscription market has more options and affinity to form partnerships and symbiotic relationships to provide benefits to each other with their co-existence. One subscription-based business produces ripples in the subscription ecosystem and creates opportunities for others to take advantage.

Stability

The predictability induced by the recurring revenue is not the one security that stables the subscription-based businesses, many other factors help subscription business to become more stable and secure to continue with the business model.

Businesses are not about seasonal profits, it’s about having the large bottom line that contributes to the growth of the revenue with time and time, again. This is why the subscription business fosters more loyalty with customers to form long-term relationships.

Additionally, having a large customer base and customer loyalty allow businesses to take major business decisions or innovations in products to meet the demands of the latest technology or business trends driven by business analytics.

Reliability

One of the major advantages of the Subscription business model is recurring revenue. Subscription-based businesses have the opportunity to earn more over time. The predictability of the recurring revenue brings reliability to the system. Each subscription is a commitment by the consumer and an opportunity for the merchant to continue to have revenue falling into their bank accounts for an ensured period. Even, in the toughest times, reliable recurring revenue streaming allows businesses to survive and devise their long-term business strategies with data-driven predictions that can combat the inflictions and eventually grow their bottom line.

Also Read: Cloud Billing Market – Implications, Trends & Applications

Subscription Services and Different Businesses

The subscription business model has already inspired many businesses across the industries. Here we have listed a few of the businesses that are greasing their survival wheels with subscription offerings:

Food and Dining Industry

Food delivery services have changed the landscape of food from outside the kitchen. As more and more people are getting dependent, online food services have also become over-competitive.

On the other hand, the surge in online order has forced them to come up with their parallel dining services focused on ready-to-eat meal kits subscriptions.

These two trends are the results of customers’ increased affinity for ease, predictability, and convenience food-on-subscription provide.

eCommerce and Retail Industry

The biggest beneficiary of the subscription is the retail and eCommerce industry. The subscription eCommerce has become a whopping market with the subscription box subscriptions and products like groceries, electrical appliances, and others available on subscription packages.

Education and Online Learning Industry

The internet, ascending technology, smart devices, and the connected ecosystem of education make it feasible more than ever for the people to continue their education and learning beyond the borders anytime and from everywhere.

In the last few years, a massive inclination of the students has seen towards subscription-based programs for language, skills development, and other courses. The trend is evidence that people are also developing more business opportunities as well.

Media and Entertainment Industry

The media and entertainment industry is the precursor of the triumph of the subscription business model. Since ever newspaper and print have been thriving with the subscriptions. The digital change introduced the new-age media subscriptions in the forms of streaming subscription services, gated digital media subscriptions, podcasts, and magazine or e-paper subscriptions.

Today, Subscription video on demand (SVOD) is the most thriving subscription industry and eyeing more than USD2 billion dollar a year.

Marketing, PR, and Advertising Industry

It is an age of online marketing. Without using digital marketing platforms, businesses cannot garner the customers’ attention they are looking for. The whole infrastructure of digital marketing and advertising is based on subscriptions. The digital marketing automation and management software are available on a recurring basis, the marketing agencies or freelance marketers, all offer their services as subscriptions, and the technology is thriving on the data available through the subscription-based SaaS technology.

Healthcare and Telemedicine Industry

With the inception of online clinics, healthcare businesses are experiencing a rapid revolution in providing services such as consultations, treatments, testing, medicines, etc. on a recurring basis.

Adopting the model of B2C subscription-based business, telemedicine businesses are thriving and growing their networks from one region to another in weeks. Due to the convenience and cost-efficiency of the subscription plans, providing on-demand consultations and prescriptions for the treatment at any time, spur the opportunities for recurring revenue.

IT, Software, and Cloud Services Industry

After the streaming subscriptions, SaaS and other cloud computing subscriptions are the most successful business streams of the subscription economy. Personal or professional, subscription-based SaaS products are providing solutions to everyday concerns. From business processes management to personal video calling, budgeting, and management, the subscription-based cloud solutions have revolutionized revenue streaming for the IT sector.

Fitness and Personal Care Industry

In combination with smart and connected devices available on subscriptions, health, fitness, and personal care programs are leaping in the market. From salons to gyms and yoga retreats, counseling programs are available on the subscriptions to make people indulge in happy and healthy living.

Shipping and Courier Industry

The subscription box services, subscription eCommerce and retail industry, and subscription-based food delivery services are some of the subscription streams that are giving the wings to the subscription-based shipping and transport industry as well.

With the subscription business model, courier companies are also effectively stretching the lifecycle of corporate customers by providing them access to personalized courier services as subscriptions.

The potential of reliable and secured revenue along with customer dependency forces the courier industry to follow the subscription-based business model that has already prioritized customer retention over customer acquisition.