How do subscription orders work?
Subscription orders have become trendy because they often best meet the needs of customers. This trend is called Subscription commerce. The classic subscription models are Replenishment, i.e. refilling food, for example, that you consume frequently and regularly. Die club membership They are often found at gyms.
In addition to Pure or pure subscriptions Is there Soft subscriptions, which are characterized by more flexible terms and notice periods. Here, a distinction is also made between Pay-as-you-go models, where the price depends on consumption, and the Subscription flat rate, where the price is fixed and can be consumed or used as much as the consumer's heart desires - as is found in streaming services. cloud software or SaaS (Software-as-a-Service) Is for b2b customers a common pay-as-you-go model.
There is also Freemium subscriptions with free basic versions that can be extended with certain paid features. Mobile phone plans often work with hybrid subscriptionswhen a fixed tariff is used for a fixed price, but this can be expanded to include more data volume, for example.
What are the advantages and disadvantages of subscription models?
The Reason why Subscription models Working so well is probably primarily convenience: It is much easier to have groceries that you regularly repurchase delivered to you than to go shopping separately. Despite all the convenience, health should not be neglected, which is why there are now also cooking boxes in a subscription model. Only the ingredients needed to cook the dishes yourself are delivered.
Products in the subscription model should give customers a added value offer what is Niche products suitable. If the competition in a particular segment is too high, this also results in the price being reduced with the help of discount promotions to keep it low. Then you have to make an extra effort to make a particularly large number of sales and the margin It still remains low. A certain cost factor is also free trial periods, which reduce customer inhibitions to use a product. But for you they can cost-intensive be. Then you must Consider whether they are worthwhile.
Customers should be addressed personally and also personalized offers because it gives them the impression that they have the subscription in their hands and are deciding on it. However, personalization is good for subscription orders because, via evaluation tools, the Ordering behavior and interests can be analyzed. Personalization even uses Netflix, for example, by evaluating interests and adjusting the thumbnails: This means that every user sees different preview images of the same series on the start page. Personalization therefore works very well on a subscription basis.
Are particularly customer-friendly flexible cancellation options. Because you want yours Like to retain customers over a longer period of time, where inflexibility acts as a deterrent. Especially when the model no longer fits the everyday habits of customers. Ideally, they are so excited that they take out a subscription after testing and remain customers for a longer period of time. When in doubt, they also save money because individual products are more expensive compared to the subscription model.
However — who doesn't know it — a subscription can also result in subscribers not really using or not using the offer at all and not canceling the subscription out of habit — after all, you could use it again.
