The Subscription Business Model – Why Your Business Needs One?

The days of one-time transactions and product-oriented sales are reaching their decline. Nowadays, companies are focusing more on their customers and trying to understand the customer more rather than trying to sell and bill them for one-time transactions. In this article, we are going to talk about…

Times have changed, and so have customers, customers are now looking for outcomes, not ownership. We’ve seen the emergence of brands such as UBER, Airbnb & Netflix; these new business models are challenging the traditional businesses today.

Indulge in Subscription Model Business to Boosts Your Revenue

Do you want to get rid of the monthly subscriptions to avail a product or service? The subscription business model is the solution! The subscription-based business model is established to build long-lasting relationships with customers by indulging them in the recurring billing software, also referred to as recurring revenue.

The subscription revenue model is gaining popularity day-by-day as both the companies and customers are getting benefited from it. Companies have started acquiring more subscribers hence accelerating the revenue. Whereas, the customers can choose their specific pricing tier based on their needs and subscribe for a year. Being flexible, the model meets all the customer expectations hence retain them for the long term.

A complicated billing system can annoy the customer, and they may not last for long, thus the subscription model business effectively solves this issue. It enables the customers to purchase the subscription one time and have consistent access to the product or service. This way, the customers do not have to get into the hassle of paying bills monthly as the subscriptions get renewed automatically with a pre-authorized credit card.

Therefore a highly adaptable subscription based model is becoming a go-to choice for customers due to the availability of flexible change and renewal options.


Consumers are now looking for subscriptions for recurring transactions. This is a great opportunity for companies to introduce subscription-based services to build brand loyalty. Subscription economy companies focus on the customer and their individual needs; customization and constant improvement are the ways to go in the business. Subscription e-commerce services offer consumers a convenient, personalized, and cheaper way to buy whatever they need.

As a business in the subscription economy, your focus is on holding existing customers, monitoring their usage, and finding new ways to build more value for your customers so that you can build long term relationships.
There is rarely any industry today that hasn’t seen a successful subscription model. If done correctly, the subscription model can create a recurring revenue stream. Subscription models are:

  • Easier
  • Affordable
  • Convenient
  • Personalized

Subscription Models aren’t only good for the customer, rather they’re good for the business as well. A subscription revenue model helps you to capitalize on your strong customer relationships, something which your board will love and so will you.

The major plus of a subscription-based model is that they massively reduce costs! Once you’ve established a customer base, you won’t need to repeatedly market yourself for repetitive transactions, no more third-party transaction costs, and no more monthly transactional fees! Sounds great, right?

Top Subscription Business Models Of 2020

According to a survey by Mckinsey & Company, 46% of customers already pay for an online streaming service, and 15% have subscribed to an e-c`ommerce service within one year of the service.

mckinsey Company-subscription user survery

Streaming services

The most popular users of the subscription model are content streaming services like Netflix and Spotify that have built up a massive customer base by their subscription services. They do this by focusing on creating a valuable and pleasurable customer entertainment experience and at a very low price.

Monthly Subscription Boxes

Another example of subscription-based services are the monthly subscription boxes. This form of pricing works because it is convenient and easy for customers. Customers in such scenarios are willing to pay a premium just for the comfort of getting an item delivered, hassle-fee, at your doorstep. The beauty industry has already incorporated this idea and is functioning with success.

Food Delivery

Everyone needs food, right? And grocery shopping for some consumers can be a hassle. Customers need to take out time to think about what items they need and what things they’re running low on and then make constant rounds to the stores. Some businesses have opened food delivery subscription services, easily customizable subscription packages that give customers the ease of not going to the grocery store (repeatedly), and searching for the products they want to find that one thing or the other is out of stock.


The main challenge, however, is not on the service you offer but the experience you provide your customers with. Customers are not fans of being tied down by one recurring subscription service; they will only do so when they see a benefit for themselves, i.e. lower costs, increased personalization, etc.

So how do you get customers to subscribe?

Recommendations and positive online reviews are some of the key causes for consumers to sign up for a subscription service. Subscribers want something new and innovative and are also motivated by financial incentives like discounts. To maintain and build up your subscribers, companies are working towards tailoring their approach to subscribers over time by analyzing their purchasing habits.

According to surveys, consumers have claimed that they prefer having personalized service, and 28% of them stated that it was one of the important reasons for them to continue their subscription. It is important for consumers to have a great experience with subscription as consumers are quick to cancel their subscriptions if they don’t find value in keeping the arrangement.

How To Start The Subscription Process As A Company

Making a subscription plan can be confusing and frustrating. Additionally, there is no one size fits all, and all those numbers that can leave anyone feeling overwhelmed. Founded in 2016, Xion is a free subscription management software that connects customers to the marketplace and lets customers shop for local items easily. Xion is an easy to use subscription platform and a place where anyone can create a business in minutes or supercharge their existing business.

A man entrepreneur owner SME business is packaging box to send his customer

For businesses and companies unfamiliar with the subscription process, starting out can be no less than frustrating. From determining the right price to finding out the value and the type of consumer behavior you want to keep. Xion provides a subscription software that helps ease out the entire process by tracking profit margins, churn rates, and helps you figure out the policy you want to keep.

It is also extremely easy to make new subscriptions, and estimates say that it takes an average user around 2 minutes to make a new subscription package on Xion. This is a new way for companies to make subscription models without the complexities involved with the current models. Another added benefit is that Xion provides you with an interactive platform to engage with your customers and peers.

This is great since it helps build communication and strong business associations. Since the whole process is automated, this means that tracking your payments and revenue is now easier and instantaneous.

The subscription software is online which means that you can work from anywhere. It is time for companies to jump into the subscription revenue business and rethink the way they do business so that they can reap the benefits and growth this type of trade has to offer.

Join the Xion experience and watch your business grow bigger and better.