Every new business quickly realizes that revenue coming in every period on a committed basis is the Holy Grail to survival and growth. According to many experts, getting new customers is five to ten times harder than getting additional revenue from existing customers. Thus the subscription model (low fixed monthly payments), is rapidly becoming the norm for new products and services.
Subscription pricing has been around for a long time for magazines, cloud-based software, and gaming, but now I'm seeing it used for just about anything, including for more stylish clothes via The Mr. Collection, gourmet foods via TryTheWorld, and toys for your kids via SparkBoxToys. If you are an entrepreneur not using this model, it may be time to consider a pivot.
In fact, I just finished a new book "The Automatic Customer," by John Warrillow, who runs the successful subscription based research business SellabililityScore, outlining nine common variations on the subscription model. If you are looking to start a new business in any domain, it's definitely worth your time to check your fit for one of these models:
If your startup is in the Business-to-Business (B2B) world, you need to realize that the subscription model has evolved considerably since SalesForce.com introduced Software as a Service (SaaS) way back in 1999. Popular variations of cloud subscription services now include offerings billed as Platform as a Service (PaaS), and Infrastructure as a Service (IaaS).
So now may be the time to start or transform your business into a recurring revenue engine with subscriptions, or just add an option to get some extra sales growth. But be aware, these models bring with them a whole new psychology of selling, supporting, and measuring your success with customers. Do your homework before jumping in with both feet.