Subscription business models are becoming increasingly popular and widely accepted in nearly every industry. When it comes to eCommerce, subscription business models have become a regular part of offering convenience and an unforgettable experience to online customers. A recent study by Invesp noted that half of the online shoppers (54%) have subscribed to an e-commerce subscription box service.
Before we jump into the numbers, let’s brush through the basic knowledge about the subscription commerce model.
What is the Subscription Business Model?
eCommerce business owners wish to minimize the efforts of their online customers and facilitate their every step of the shopping journey. From providing details about a product, offering discounts to them, and reminding them regularly of the product purchase to offering a seamless checkout experience – online store owners ensure their customers stay.
Subscription business models are one such way to offer products and services to customers on a recurring basis. As a result, it yields an enhanced customer lifetime value. CLTV (Customer lifetime value) is the value a customer contributes to your business over the entire lifetime at your company.
Subscription Business Model Examples
It goes unsaid that the subscription business models are going to grow manifold in the upcoming years. In fact, Global banking & Finance states that 70% of business leaders say subscription business models will be key to their prospects in the years ahead! Here are a few examples of subscription business models adopted by some well-renowned companies:
Fitbit
Fitbit helps its customers with personalized and curated goals by giving them challenges, coaching, and guidance. This premium subscription costs nearly $80 dollars every year and $10 per month. Based on your subscription, Fitbit helps you maintain, measure, and uplift your health by offering notable insights.
Amazon Prime
You can listen to 2 million songs, stream TV, books, magazines, online storage, and save delivery costs with Amazon Prime membership. The brand offers all this convenience at a rate of $139 annually and $14.99 per month.
LinkedIn Learning
Being one of the well-renowned business relationship catalysts, LinkedIn understood the need to offer learning courses to its users. In 2015, the company acquired Lynda, an e-learning startup, and started LinkedIn Learning. It offers learning courses to companies, and nearly 78% of the Fortune 100 companies recommend it.
Types of Subscription Commerce Business Models
Although there are multiple kinds of subscription business models, we have jotted a few below for your easier understanding.
Service Subscription:
A few best examples of service subscription include WordPress.com, Statista, and Mailchimp. This is one of the most common business models where a user can subscribe to your service for their repetitive usage. These business models revolve around harnessing value-based pricing and adding extra benefits to offer value to the customer’s life.
Subscription Box:
Unlike service subscriptions, these are the evolved versions of product-based subscriptions. Based on their preferences, customers can subscribe to receive the product/s. This subscription model is widely accepted, starting from meal boxes to self-help books and everything in between!
Digital Content Subscription:
What better example than Netflix and Spotify? Giants like these have already adopted offering digital content subscriptions to their users. In return, they are able to deliver a personalized customer experience and earn loyalty toward their brand.
What Difference Does The Subscription Business Model Bring?
The convenience and flexibility of subscription business models go a long way in offering an unforgettable customer experience. Besides being sustainable, these business models have multiple benefits if implemented correctly by any eCommerce business. Keep reading to learn further:
Predictable revenue
This might be one of the biggest benefits a subscription model brings along – a predictable and stable revenue stream! When you know the pre-conceived product demand, it becomes easier to make decisions accordingly. To top that, it helps you ensure your business’ viability during financial turbulence while keeping the operations up and running.
Stronger customer relationships
Offering subscriptions to the products help your customer overcome the challenge of remembering to order timely. While offering a personalized product, subscription business models utilize extensions to remind the customers to order and keep their stock filled. This way, customers start building trust in the product as well as the online store, resulting in a stronger relationship with them.
Lower retention spends
The beauty of subscription business models is that you just have to pitch once to your customers! If they convert, they are already signing up to buy the product on a recurring basis, creating a sense of commitment. This only means you are saving a few marketing dollars for targeting customers. As a result, you have minimal retention expenditure!
Magento 2 Subscription Extensions For Online Stores
If you’re starting from scratch, you may consider Magento store development to establish your online presence. However, if you already have an existing Magento store, simply opt for a reliable Magento 2 subscription extension, to begin with. From offering lucrative discounts, optimized checkout experience, supporting major payment gateways, and enabling subscription-based business models to offer personalized experiences – Magento 2 extensions work magic for your online store.
Our Advance Subscriptions & Recurring Payments extension Magento 2 is crafted for the eCommerce businesses that wish to tap into the potential of recurring revenue stream. It enables an advanced and feature-rich product subscription functionality on your Magento 2 store that allows your customers to subscribe to multiple products on the go.
This advanced Magento Subscriptions & Recurring Payments Extension comes with various features such as managing the customer data and subscription details from the admin panel, altering the subscription details, e.g., start, pause, or stop the subscription, detailed information about the subscribers and their orders, and much more. Moreover, this Magento 2 subscription and recurring payments is compatible with major payment gateways and eWallets which makes it hassle-free for your customers to checkout quickly while making a purchase or subscribing to their favorite product.
To Sum Up,
At MageDelight, we help you upscale your eCommerce business by offering Magento solutions that enhance customer experience and help you build a stronger relationship with them. Our Magento extensions are formulated to ensure your customer’s overall purchase experience is more accessible. Whether you are offering special discounts, trying to implement a subscription-based model in your store, offering flexible payment methods, or sending notifications to give them timely updates, all our Magento 2 extensions are the perfect fit for an eCommerce store.
Also, you can refer this Advanced Subscriptions & Recurring Payments Extension FAQ Page for most common question and it’s answers.
If you need our professional assistance, feel free to contact us anytime.
