How to use the subscription model to sell products? – Create and sell digital products #5

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Do you know how to use the subscription model to sell products? Is subscription good for your business? Research conducted by Recharge shows a significant increase in the popularity of the subscription model in e-commerce. Statistics indicate that the subscription model directly influences the growth of average order value (AOV) and customer lifetime value (LTV). Read the article to learn more.

How to use the subscription model to sell products? – index:
What is the subscription model?
Subscription types
Customer perception and business model
Business models in the digital space
Advantages and disadvantages of the subscription model
Examples of subscription models for selling digital products
What is the subscription model?
In the subscription model, the customer decides to pay a fixed fee in exchange for access to the chosen offer or service. This form of sales is used for both physical and digital products. In the past, recurring payments were used for subscriptions to favorite printed magazines, while today the model is being used to sell products in various industries.

In the subscription model, the main focus is on long-term cooperation belgium whatsapp number database the seller and the customer. Better customer engagement allows the seller to earn a regular and stable monthly income. That is why it is worth taking some time to design a business model that suits your activities, so that you can connect the customer with your product and your brand.

Subscription types
When considering switching to the subscription model, one should familiarize oneself with distinct types of subscription, therefore, in the paragraph below, the description of three subscription models with related examples of application.

Access subscription model
The main value for the customer lies in the fact that he or she has access to products that are not available to others. This can be access to specific content (publications, movies, music, and more) or services related to other products, such as free shipping, discounts. The subscription model of access is often used in the sharing economy model, where products are shared and used, but not necessarily owned – this subscription model has been adopted by brands such as Airbnb, Uber, Bolt, and Free Now.

Curation subscription model
This model is a good solution for companies that like to surprise their customers. In this subscription model, customers don’t know what exact product they will receive. The company curates and delivers a variety of products based on their market. The curated subscription model is the most common and has proven to be the best for the food, beauty, and apparel industries.

Replacement subscription model
It is the second most popular subscription model with high conversion rates. In this model, products are delivered to customers on a regular basis, it is usually used for daily and necessary products such as: fresh vegetables, fruits, boxed diets, hygiene products and many more.

Customer perception and business model
Subscriptions can be categorized based on customer perception, and customers may find the subscription model appealing for two main reasons: convenience and discovery.

In the case of discovery subscriptions , the services are focused on customers who have not had direct contact with the product and have only decided to purchase it based on recommendations.

Convenience subscriptions make some aspects of customers' lives easier. The customer orders the indicated product or service regularly, using services that allow order automation.

Business models in the digital space
Products that are characteristic of the digital space influence the form of the final subscription model used by the company. Accordingly, we can distinguish two business models as follows:

SaaS (Software as a Service) model – this business model is based on providing access to the service without the need for purchase. The application can be used continuously in exchange for recurring charges.
XaaS (anything as a service) model – is an extension of the SaaS model, including a wider range of services, for example: database as a service (DbaaS), desktop as a service (DaaS), communications as a service (CaaS), monitoring as a service (MaaS). Billing for the service is done analogously to the SaaS model.