The post Is your eCommerce Business Ready for a Subscription Model? is an original post from Access Payment Systems - Electronic Payments Made Easy!.
Is your eCommerce Business Ready for a Subscription Model?
More and more consumers are opting for subscription services as opposed to the traditional ownership model. To accommodate these consumer preferences, an eCommerce business must change their business strategy to align with the consumer. Businesses now do seem to be moving in a similar direction, offering fixed monthly subscriptions as well as consumption models that combine subscription, one-time, and usage-based billing.
Flexibility, value, and convenience are the key drivers of this market trend. With an increasing number of consumers looking for both flexibility and convenience to pay for only what they use, they want to derive more value from the products they choose, with little to no upfront payment. This thought process and new technology has further contributed to the growth of electronic payment solutions.
Subscription Trend Everywhere
Be it Adobe, Netflix or NetGear, most businesses are now evolving into services companies, selling consumer subscriptions help them get more value from their products. Online brands can rejoice with the rise of subscription commerce, helping them create new recurring revenue streams while enjoying healthy, lasting relationships with consumers.
Here are a few points to consider if you want to add subscription commerce to your online business:
1. Is the subscription model right for your product?
Today, the online subscription model has expanded to embrace a range of vertical industries, including packaging, consumer electronics, and the telecom & services industry. Several mobile telecom carriers attract consumers with the option to upgrade smartphones for a nominal monthly subscription, instead of requiring an upfront payment. They also offer a “pay for what you use” model. The subscription model offers consumers convenience, flexibility, and value. When it comes to receiving payment, be it via ACH (eCheck), or credit card processing, the subscription model must be able to handle all forms of electronic payment methods.
Related: ACH, Paper Checks, eChecks, Electronic Payments! Confused Yet?
2. Does it align with your overall strategy?
A subscription model is designed to build continuity programs for the delivery of specialty (or even everyday) products. It may even be possible to offer complementary services through subscription, enhancing the functionality of the product.
The “freemium” strategy is another deployment model used to facilitate transition to a subscription model, so consumers can try a basic version for free while accessing full features for a monthly fee. With the freemium model, users are able to “test drive” the services or product before committing to a subscription.
Related: Set up Your Business to Receive Payments, the Right Way!
3. Do you have a subscription ready infrastructure?
A subscription model may involve time-based access or other sophisticated strategies, including metered or tiered usage. As an eCommerce business, you may want to make sure that you are able to help consumers modify subscriptions while on the go. There are a lot of back-end complexities along with infrastructure and management issues involved in the subscription model. Are you equipped to protect consumers against piracy? How well equipped are you to optimize renewals?
Brands must invest in a new business infrastructure where they can manage the complexities of the subscription model while keeping pace with evolving needs of consumers.
Related: Switch to Subscription Business Model and Attract More Investors.
Bottom Line
Consumer preferences are evolving, with increased preference for subscription model. The evolution in consumer choice is renewing interest in subscriptions. Carefully considering your eCommerce business infrastructure is the best way to strategically think about your product, making it subscription ready for the future. You must keep your business strategy up to date if you want to stay in business. It’s as simple as that.
Contact Us for more information on Credit Card Processing, or eChecks and ACH Transactions. Or take us up on our FREE Merchant Account Analysis offer. We’ll analyze your merchant account rates and let you know how to Save! If you are ready, you may be able to Switch and Save!
The post Is your eCommerce Business Ready for a Subscription Model? appeared first on Access Payment Systems - Electronic Payments Made Easy!.