Running a small business is a challenge in and of itself. While you have to think of ways to increase your business’s revenue, you must also develop customer retention techniques to ensure your customers stay with you. Between evolving customer interests and economic cycles, it may be more difficult than you initially thought. No matter how challenging, however, there are ways to keep income flowing while you seek out more repeat customers. Below, we talk about subscription commerce and why it can benefit your small business to ride this potentially lucrative wave.
Types of subscription business models
Before getting into the benefits of these subscription services, let’s look at how the subscription business model works. Essentially, subscription commerce involves businesses providing customers with products and services in exchange for a recurring monthly or yearly fee. There are three approaches you can take when considering applying subscription commerce.
Subscription plans allow customers to subscribe to a brand to receive a specific product regularly and at a lower cost. The goal of these services is for companies to retain existing customers, focusing on repeat revenue opportunities from individual customers.
Subscription box services
Subscription box services are personalised boxes that contain items based on customers’ interests when they sign up. They’re designed to increase brand exposure and convert subscribers to new customers by including a combination of relevant products in one box.
The access model
The access model offers exclusive products and services to customers with an existing subscription. The goal is to give members a sense of access to otherwise unavailable perks, with special discounts, offers, and products that aren’t available to non-members.
Benefits of subscription commerce
Now that you know the different types of subscription models, you may get a better idea which one best fits your business. All approaches help create a steady flow of revenue, increase customer retention, and help offset acquisition costs. If you’re looking for more reasons why you should consider a subscription model, here are some of them:
Provides a constant source of revenue
The business model is pretty simple—customers are billed regularly as they receive your products the same time every month. While other businesses are spending and running campaigns to get customers back, subscription services allow you to forecast inventory, shipments, and income much more accurately. The revenue model boosts cash flow and gives your business a longer-term outlook for a stable income. Once a customer signs up, you can project your business revenue in the months to come.
Establishes deeper customer relations
Subscription commerce entails customers receiving products and services for months at a time. This is an opportunity for retailers to understand their customer base, therefore, creating better relationships with them. Because customers get the same products or services, the more likely they’ll give your inventory selection regular feedback. At the heart of it, subscription-based businesses have more opportunities to create a sense of community and presence in their customers’ lives. If you listen attentively to feedback and work towards delighting customers based on their input, customer loyalty will run high.
Opens room for business partnerships
Subscription boxes can be a tool for both convenience and discovery. As customers receive their products on a repeat purchase basis, subscription boxes also help consumers discover and sample new products they may not have known about. As an up-and-coming brand, you can use subscription models as a marketing platform to sample products you have and create brand awareness. This opportunity also allows retailers to partner with other small business vendors to fill subscription boxes with a variety of products that are carefully selected and curated for your client.
Adds an element of mystery and surprise
Subscription models are gaining popularity because they add an element of mystery, surprise, and value. For customers, subscription boxes can be addicting when they like what’s inside and when these contents add value to their lives. Subscription commerce market is a fast-growing market that allows retailers to provide items that customers already anticipate and surprise ones that they didn’t know they even needed.
Encourage loyalty with subscription commerce
With the planned nature of subscription models, your small business can optimise logistics and gain more opportunities to save on resources that can be devoted to improving your customer service. When customers benefit from a reliable routine and potential money savings from your subscription services, your small business can heighten customer experience, boosting customer loyalty.
At Bartercard Australia, we offer monthly membership fees at cost-effective rates! When you join our membership-based community, you can easily barter your products and services with tens of thousands of other businesses. Want to learn how your business can benefit from our membership and trading opportunities? Contact us today!