6 Business Strategies to Increase Your Revenue with Subscription-based products in 2022
January 26, 2021
6 min to read
When you think about the common actions to grow your business, creating or developing your products, using marketing to increase brand awareness, and hiring salespeople to close deals, are the main ones that will probably pop your mind. But when you have a subscription-based business, the strategies you will implement need a shift so that you can win.
Over the years, many trends have revolutionized the way companies approach business and customers. That’s why businesses need to constantly evolve their strategies to survive a competition with a growing market full of startups. One such trend is subscription-based products, which helps businesses generate revenue while meeting consumer demands simultaneously.
This business model can help companies increase their revenues by up to 11%, which is why by the end of 2021, 80% of companies were offering subscription-based products; also because it’s an easy and flexible way to sell them. Besides, customers like the fact that they’re only charged when they use the service instead of all at once. They also like that their price can go down if they buy in bulk.
The subscription model has fundamentally changed the way consumers approach shopping. Gone are the days when people would go out to stores and overspend on products they did not need, only because of special deals or discounts available for a limited period.
In addition, people nowadays are more discerning about what they purchase. They want quality products that enhance their lifestyle, and they are willing to pay a fee for it. In fact, the US market is expected to witness a whopping growth of double-digit percentages in the demand for subscription-based products.
Here are some of the strategies you should apply to win more customers and keep your existing ones.
1. Upsell and Cross-sell your products
To upsell your products, first identify those customers that you know would benefit from buying a subscription product that has a higher price. Show them all the benefits they will be missing if they just stay with the regular subscription plan they have.
For example, if you sell skin care products, offer them the option of subscribing to a box that includes all the products they usually search for, and also the product the customer is currently subscribed to, so they will be motivated to make a purchase that has a higher price, but at the same time has lots of benefits for the customer. With the Combo Box feature on Subscriptions Cloud, you can easily create personalized boxes for those types of customers.
Then, combine that strategy with Cross-selling, by making your customers be aware of those products that will complement their purchase. In the case of the skin care products, you can offer them a complementary beauty bag to carry all those products, and encourage the purchase with a CTA that says: “You May Also Need”.
2. Optimized the way you get reviews
By the end of 2021, 92% of consumers trusted online company reviews as much as personal recommendations.
And so, it is no surprise that reviews are the number one search ranking factor for local businesses, which is why you must focus your efforts on getting them. On average, companies get 6x more reviews by sending personalized emails rather than leaving a generic message on review sites like Yelp and Google+.
These sites will also send you customers directly if you’re active in their community or follow their posting guidelines. By staying active in these communities, you’ll gain valuable customer insight and increase your brand’s credibility.
3. Offer Discounts
This is another common business strategy you can employ to lure more customers. For instance, if someone subscribes for a one-month plan of your product that usually costs $10 (cost may vary depending on niche), then offer them an additional month at half the price as a reward. This phenomenon is called ‘price discounting.’
Another example would be offering three free months when people subscribe for six months, and so on. You can even take this strategy further than just subscription-based products and apply it to other types of businesses, such as restaurants or retail stores with card schemes. You could set up customer loyalty accounts where the more they shop at your store/restaurant, the bigger discounts on their orders they get.
4. Upgrade Your Marketing & Sales strategy
At the end of 2021, only 7% of small businesses reported that they sold all their product or service capacity in a given year. You might find this statistic discouraging because it means 93% of small businesses are leaving money on the table with their current marketing and sales methods.
This is why you need to start using marketing automation tools like HubSpot CRM to close more deals by tracking prospects’ behavior, lead scoring, contact management, etc. These tools will allow you to know exactly when your leads are most likely to buy so that your marketers can send them personalized messages through email or social media accordingly. At the same, there’s no harm in scaling your existing sales team by hiring more high-performing sales reps.
5. Enhance Your Customer Experience
Besides automated emails, you also need to beef up your customer service through live chat on different channels like Facebook Messenger, WhatsApp, and so forth. You can’t achieve this without first focusing on building a strong relationship with your customers.
Once they trust you with their patronage, they’ll be willing to give you honest feedback about their experiences with your brand. This will help ensure that all future customers have the best possible experience before buying from your business or subscribing to one of your subscription-based products or services.
By 2021, 80% of people were willing to pay an extra $1-$10 per month for a better customer experience.
You may want to read: Why should you focus more on your loyal customers than the new ones?
6. Offer an All-inclusive Package
Offering only part of your services or products as subscription-based will not bring you much revenue because consumers need the option to take it all (frequently).
Think about your favorite brand of music; how would you feel if they allowed you access to only two songs per month?
You’d probably leave this provider and move on to another brand with more songs to offer. Similarly, suppose people can only subscribe to specific products instead of the entire product range.
In that case, they will most probably go ahead and seek another service provider who offers everything under one roof.
Employing any of the six business strategies can help increase your revenue through subscription-based products and services. It’s important to remember that you need to focus on enhancing the customer experience with your brand to be successful. This will create trust and loyalty among customers, which are essential ingredients for a thriving subscription-based business.
You can start implementing these strategies for free using Subscriptions Cloud. Enjoy our 60 days free trial, and take advantage of all the features it has to help you win customers and scale your subscription business. Try it for Free here: https://www.bigcommerce.com/apps/subscriptions-cloud/?search=subscriptions%20cloud
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