If you’re a small business that doesn’t have the reach of some of your competitors, you need to take every opportunity to retain the business you have. One such way of ensuring repeat business is to set up subscriptions to your products or services. But how do subscription models for small business operations work? Here, we explain the types of subscription you could offer, the benefits of doing so, and how to leverage such a model for success.
Making it easy for your customers to purchase your products and services is a cornerstone of a successful business. If your clients sign up to subscribe, they will have peace of mind that they will receive a top up/new product before the old one expires or they use it up. This means one less thing on the to-do list for busy or forgetful clients.
How Do Subscription Models Work?
Subscription models involve clients signing up to receive orders on a regular basis, be it yearly, monthly or weekly. In exchange for a regular fee (some businesses offer discounts to those who sign up to subscriptions) the customer will receive products for as long as the subscription lasts for, so long as they make the regular payments.
Using a subscription model allows you to have an almost guaranteed regular income for your business. It can also allow you to offer additional products alongside the regular subscription as a top-up, which can help improve your revenue further.
Setting Up Subscriptions
There are several considerations you may want to make when setting up a subscription service for your business.
- Ensuring your delivery service can cope with demand – If you know how much monthly income you are going to get via your subscription service, you may need to consider outsourcing your deliveries. If you do, you need to make sure that the delivery service can cope with increased demand when your business grows. A subscription service is only as good as those that deliver it. However, on the upside, if you are giving a delivery service regular business, you may be able to benefit from better rates.
- Making sure you have enough stock – This seems obvious, but if you are offering one off subscription services, you need to gain some insight into how much stock you will need to cope with them if sales increase rapidly.
- Making it easy to renew – Allowing your customers to log into an online account and renew their subscription, as well as purchasing any add-ons is a good way to ensure your subscription service meets their needs.
Making Subscription Models Ethically Sound
Obviously, this leads to a captive market, who regularly purchase your products without really having to do anything about it. However, there is a little bit of negativity from some people about subscription models so you will need to think about this before you decide to launch. Some people see them as a way for a business to “sneakily” keep you buying and there is also the risk of people receiving too many products that they won’t use, leading to waste.
One way to make a subscription model more ethically sound is to follow a subscription model that reminds clients that their new product will be on the way in a few days. That way they have the opportunity to opt out, delay their delivery or cancel altogether.