Subscriptions Are Sexy – But Are They Right for Your Business?


Every month, Birchbox sends out close to a million boxes filled with makeup and skin care samples to their loyal subscribers. Other industries were quick to jump on the subscription bandwagon: today, there are subscription boxes available featuring snacks, jewelry, socks, art supplies and more.

Subscription boxes are only the tip of the iceberg. There are many businesses that operate on a subscription model, even if they don’t explicitly call their service a subscription. The Software-as-a-Service tools you use to run your business – things like Quickbooks and Dropbox – bill for their services annually or monthly; the recurring nature of the relationship makes things convenient for the customer who wants to keep costs predictable and under control.

The Benefits of Subscriptions for Your Business

The immediate appeal of subscriptions for the business owner is clear: regular, guaranteed income is a nice thing. Subscriptions allow for operational efficiency: if you know ahead of time what you’re expected to provide and when you’re expected to provide it, getting the systems in place to make it happen becomes exponentially easier. Some businesses choose to offer subscription services in addition to their regular offerings; other firms choose to operate exclusively on a subscription model.

Is a Subscription Right For Your Business?

The first question to consider regarding a subscription model for your business is what would a subscription contain? What products or services do your customers come to you for on a regular, recurring basis? This can be need driven – a pet retailer knows their clientele is going to use dog food on a daily basis – or it can be more fun – image a crate filled with squeaky balls and chew toys. Subscriptions are a good way to introduce your customers to products they may have otherwise never discovered.

Service providers can provide offerings based on seasonal needs – sometimes you need your lawn service to plow snow, and other times you need them to mow grass. B2B service providers often provide a suite of services, from coaching to direct solution provision: a subscription model can be created that allows clients to access the services they need on a dynamic basis that meets their current business needs.

Tough Questions: Accountability, Reliability, Infrastructure

Understanding what you’d like to offer your customers on a subscription basis is step one. Being sure you actually have the operational infrastructure in place to make it happen is step two. Subscription models carry a fairly well-defined set of expectations. Customers want the process to be entirely effortless for them, without any worries about deliveries occurring on time, product or service mixes being desirable, or billing concerns. If you have any doubts about your organization’s ability to meet these expectations, the time to address them is before you launch a subscription service.

It’s also important to consider whether the subscription model is genuinely appealing to you as a business owner, or if it appears to be a magic bullet to address slow sales and uneven revenue. Introducing a subscription model won’t necessarily fix systemic business concerns. However, if you have a fundamentally strong business and wish to add an additional revenue stream, a subscription model can be worth investigating.

Subscriptions Are Sexy – But Are They Right for Your Business?
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Subscriptions Are Sexy – But Are They Right for Your Business?
Subscription business models are trendy - and don't stop at subscription boxes - but ask yourself, are they right for your business?

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