The subscription economy is important in the SaaS industry since SaaS practice is running. Let’s look forward to our current economy. We notice a tipping point is emerging in modern eCommerce, that is, the subscription economy, which results from changing consumer behavior trends.
I can surely say that many people aren’t clear, “What is the subscription Economy?” keep Patience here; you will get all the necessary information to understand Subscription Economy.
What is the Subscription Economy?
The subscription economy is a general trend of companies shifting towards a subscription business model or SaaS business model. It is totally opposed to the traditional business model in which you don’t need to make a one-time payment or transaction on products and services. In fact, you get a chance to sell different kinds of products and services in different payment plans.
The modern subscription economy is different from the old software industry
Before the modern subscription economy, many industries and companies are focusing on delivering a specific solution or product to as many people as possible; it doesn’t matter how many times it is. But today’s main focus is open, how individual people get the value out from the product.
Here is a strategy that focuses on people, involves a shift in how industries view their product experience:
- It’s about responsiveness, not about perfect.
- It’s not about generalization; it’s about customization.
- It’s not about ownership; it’s about access.
- It’s about automated relationship building and improvement.
- It’s not about planned obsolescence; it’s about constant improvements.
It would help if you grew your relationships, not your transactions.
The important factor in the subscription economy is; you need to build a strong connection with the consumers instead of growing your transactions. If you work on increasing transactions, your transactions will automatically increase by selling products and services.
When companies are focusing on building a relationship, they are working from the top of the pyramid down and laying the groundwork for the consumers to pay more in subscription based services more and more.
To achieve this, you need to focus on two main growth levers.
- Increase the number of subscribers you charge
- Charging subscribers more
But, since 2016, many new changes include per subscriber. Below we have mentioned few changes in which includes;
- Addition of new up-sells and services
- Resuming of services
- Down sells which are better than lost business but not great
- Suspension for a long period of time
- Packaging and pricing changes
- Pause membership for a short period of time
Out of these changes, almost many changes are beneficial as both perspective user and business owner, but few changes like; cancellation and down-sell are those, which you must avoid at any cost.
Therefore, the subscription economy is embracing the changing subscription business growth and relationships with consumers. It states that as a stripe billing software service, subscription is not just a product; It is an experience. Netflix, Amazon Prime, Spottily are a clear example of subscription-based services in the Subscription economy