Why do people get married? Love is the obvious answer, but a number of other pragmatic factors play into it, as well. You just realize it is the best fit for you in so many ways going forward, and you choose to formalize the long-term arrangement.
Long-term relationships driven by the same dynamics can similarly blossom between eCommerce vendors and their best customers. Those “marriages” come in the form of a Subscription Sales Model.
Almost everyone recognizes this model, even if you don’t know it by name. Dollar Shave Club enjoys huge sales as a Subscription Sales business. So do dozens of other brands like BarkBox and Blue Apron.
You may already be having substantial eCommerce success. But do you know how to add on to your existing business by embracing this emerging, lucrative channel? With the right eCommerce platform in combination with the right expertise, it can be easier than you think.
Growth Through the Roof
Conceived of and executed properly, adding a Subscription Sales option for your customer base delivers efficiency and satisfaction to both seller and buyer. According to Zuora’s Subscription Economy Index, subscription business revenue has grown 437% over the last nine years. That kind of growth, made possible by improving eCommerce models and technology, only results from an idea whose time has come.
So how can you tap into that model from your current eCommerce efforts?
Build from Strength
The search for answers begins by identifying the core parts of your business where results are strong and opportunities are apparent for regular, recurring sales. Those areas produce proven demand, and they mark the sweet spot of opportunity in the market that you can build from. The fundamentals of the value of your product and what you offer that others can’t match become the foundation for Subscription Sales successes.
Adding a successful Subscription Sales component to your eCommerce menu can feel like a trip to the promised land – it becomes a recurring revenue stream that makes customers happy and, once operational, requires little additional management oversight.
Identifying Key Functions
Settling on a pricing model that works efficiently for you and appeals to your customers may be the biggest decision that will determine your success in this process. There is no “one size fits all” option. The four most-common Subscription Sales pricing models, according to ProfitWell include:
- Fixed/flat-rate model
- Tiered pricing model
- Per unit/user model
- Usage model
What choice you make that fits best with your business operations and the products and services you offer within that selection are your business – literally. You need to make these decisions, though, with an eye to what makes the arrangement easiest for your customers while at the same time not putting you in a position to have to completely reinvent your existing business operations.
Keeping Your House in Order
If you are up and running as an eCommerce merchant already, you have made arrangements to address essential business functions. Ideally, you want the decisions you are making while implementing your Subscription Sales offering to be compatible with how you handle those functions currently, and also to fit in smoothly with the software platform that is the foundation for your eCommerce site.
Finding the right Subscription Sales model that will integrate with operational areas like inventory control, customer data management, billing and payment options will go a long way in determining just how much benefit this new arrangement will produce for you.As a sampling of the many ways these areas can interact and produce benefits for your business, Quora has identified nine key areas that all impact how you proceed. Reviewing these, you’ll notice how interrelated they all are as the questions that underpin eCommerce in any form. Offering Subscription Sales gives you a chance to consider the relationships in these areas if they could be in optimal alignment so you could offer your best service levels to your best customers.
Making It eCommerce
Once you commit to pursuing a Subscription Sales offering, you’ll need to look at one final major question: How will this work from the perspective of how you are doing things now?
If your operation currently runs on a platform that is open source or an SAAS offering, you have options for taking that last step to joining the ranks of Subscription Sales providers. In Part Two of this blog, we’ll discuss what those options are and what factors can help you make the best decision for your continuing eCommerce success.