B2B subscriptions, compared to B2C subscriptions, have few standard functionalities where a user/company opts for service and pays the price monthly or annually. Some examples of B2B subscriptions include:
- Ecommerce Subscriptions - These subscriptions enable businesses to process recurring purchases of products and services. Businesses can also partner with delivery agencies to create autoship subscriptions for a regular supply of products to their customers at approved time intervals. In contrast with autoship, curated subscription boxes have uniquely tailored products shipped to match the customer's needs on a recurring basis.
- Software-as-a-Service (SaaS) Subscriptions - These subscriptions include software services such as communication solutions (audio & video) that are sold on licensing models (monthly or annually).
- Usage-based Subscription models - These subscriptions leverage the use of IoT devices to track services and products. These include data storage solutions, marketing tools, and publishing tools charged as per the data usage.
- Service-based subscriptions - These subscriptions offer services such as support, warranty, and product upgrades post the sales on a recurring basis.
- Product-Based Subscriptions - These subscriptions are designed to charge customers to pay for product usage on a monthly/annual basis. For example, many companies provide office and home furnishing products on a rental basis.
- Logistic Subscriptions - These services include product shipping, delivery, handling, and returns.
Along with similarities, some key differentiators distinguish B2B subscriptions from B2C subscriptions. There are:
- Purchase Journeys - B2B subscription usually require a longer time to purchase due to multi-level decision making involved in the process.
- Market Focus - B2B markets are often niche when compared to B2C markets that have a broader spectrum of products and services.
- Offerings - B2B subscriptions are more complex with different structures of services to meet different business requirements.
- Motivation to Buy - While B2C subscriptions are driven by motivation related to emotions, convenience and comfort, B2B subscriptions are based on return on investments, business value and service essentials.
Benefits of Subscription E-commerce for Businesses and Customers
For Businesses:
- Commercial growth: Ecommerce subscriptions can increase customer base and generate a recurring revenue stream to help businesses stabilize their cash flow and become more profitable.
- Enhanced Customer Relationships: Subscription e-commerce helps businesses build stronger customer relationships. Satisfied and happy customers are likely to continue using it and are more likely to recommend it to others.
- Structured Inventory Management: Subscription e-commerce can help businesses to manage their inventory better and reduce costs. It enables business forecasting businesses to avoid overstocking and understocking.
- Optimizing time and effort in closing deals: Subscription e-commerce saves time and effort for businesses by automating the buying process. Customers have a set timeline to opt for services and products; therefore, the efforts to close the B2B deals can be channelized to promote sales and attract new customers.
For Customers:
- Convenience: Subscriptions can save customers time and money by providing a convenient way to get the products they need regularly.
- Quality Assurance: It can provide the customer peace of mind, ensuring they always have the product they need at the right time.
- Rewards: It can provide customers access to exclusive deals and discounts to make them feel more rewarded for their purchases.
Transition to Subscription commerce: Rising Challenges
- Sales - Subscription commerce can challenge how businesses interact with their sales partners (vendors and resellers) since automation can eliminate physical touchpoints. It can also disrupt pricing strategies to accommodate sales benefits/commissions for partners, internal incentives, and keep the edge over the competitors to attract new customers.
- Fulfillment & Customer Service - Subscription commerce can change how businesses manage revenue and fulfillment models. The transactions are no longer limited to one-time upfront payments but are broken down into a set of multiple payments at regular intervals that can impact short-term cash flow management. Customer service essentially becomes a long-term integral component due to the systematic buying process.
- Back Office - Subscription commerce impacts business operations across the vertical. Therefore, it can bring significant challenges in cross-department communications affecting the coherence of different team setups for sales, marketing, and analytics.
How to make a subscription model work
- Understand your niche: Offering a product that meets the customers' needs is the first step towards subscription e-commerce. Keeping track of competitors' products can help you curate and modify your product to make it worth the monthly fee.
- Streamline Customer Onboarding: The sign-up process for the subscription has to be clear and straightforward on your website or app to ensure the customers have easy onboarding onto your services.
- Create a Strong Value Proposition: Providing a solid value for your subscribers can boost your subscription e-commerce. Businesses can achieve this by providing access to exclusive content, discounts, and other perks to establish loyalty.
- Enhance Customer Experience: A prompt customer support service can provide an excellent customer experience to your users. Customers are more likely to stick to your platform if you can quickly resolve problems and queries related to your products.
How to Foster Growth and Loyalty Via Subscriptions
Merchants should consider the following considerations to foster loyalty and consistent growth via subscriptions.
- Address the needs: It's essential to offer valuable products or services that customers will find useful enough to want to return for more.
- Track Customer Journeys: It's essential to manage customer subscriptions. Tracking their usage cycle and proactively suggesting replenishing the product and services can improve consistency.
- Improve Customer Engagement: It is vital to keep subscribers engaged by regularly sending them information about new products, services, or deals. An effective email and social media strategy will bolster your brand presence in the marketplace.
Subscription Commerce: Understanding the journey
Starting a subscription commerce business can be a great way to build recurring revenue and generate a loyal customer base for your business. A company can start on their Subscription commerce stores in two ways.
- Integrate Ecommerce Engine with Dedicated Subscription Service - A dedicated subscription management service can simplify complex eCommerce business processes by automating revenue streams. This solution is advisable for large businesses with multiple business niches and customer touchpoints.
- Embed Subscription Extension into eCommerce store - Embedding customized eCommerce extensions into your ecommerce store such as Magento can enhance and modify existing business operations to create eCommerce model revenue for small and medium-sized enterprises.
What does the future hold for subscription commerce?
As businesses continue to manifest, subscription e-commerce is helping enterprises achieve benefits such as higher revenues, enhanced customer experiences, and customer loyalty. It is safe to say that the Subscription commerce trend is here to stay. Three distinctive features will assist Subscription commerce in leading the marketplace in the future:
- Convenience for consumers.
- Continuous Revenue Stream for the businesses.
- Collection of valuable data for business analytics.
