A subscription is a relatively new business model through which a customer commits to paying a company for its products or services for a set time period. A customer agrees to the purchase of a year-round subscription service which they receive regularly (monthly, weekly, etc.), or you can choose to cover the cost on a monthly basis. The payment is usually carried out automatically since a customer would normally need a credit or debit card and needs to agree to regular billing. The payment can also be done by permanent bank transfer.
Where else can I use a subscription model?
– membership (regular group meetings, clubs, associations, exclusive groups)
– paid content (magazines, news, podcasts, DIY videos)
– discussion forums (groups on FaceBook, Slack, Whatsapp, or other exclusive groups)
– software and application (SaaS)
– business consulting (coaching, mentoring)
What to think about before setting up a subscription on Genusio?
1) Can I repeatedly provide my clients with products and services?
If you want to withdraw regular payments, you have to be able to offer your subscribers a repeated product or service supply. If you’re a coach, for example, it isn’t appropriate to hold a one-time workshop that a person pays for once and withdraw regular payments, but neither is 10. A regular 90-minute consultation that a client will order year-round (12 x 90 min.) would be a correct setting. In the case of consumer goods, there’s the possibility of offering a bundle that a client can subscribe to over and over again. The benefit of this method is setting up the logistics of order delivery. The package is sent out regularly in consistent intervals.
2) Can I offer my subscribers a three-step subscription model?
Places where a subscription model is already being used will most likely use the three-step subscription offer variant. The service provider generally offers the subscriber a starting package for the lowest price, a medium package for the standard price (the package is most likely labeled as their best-seller or most popular) and the biggest package for the highest price.
3) The Freemium or Basic tariff during the trial period?
It is completely common for the provider to try to entice their subscribers with a special tasting of their services or products in hopes of getting them to continue with the subscription or upgrade to a bigger tariff. Before you begin setting up a subscription, decide whether you want to reward your subscribers with something entirely free of charge (such as a membership to an exclusive part of your website) or if you’re going to be collecting a small fee from the beginning with one month being forgiven. In practice, it is definitely more difficult to go from the Freemium strategy to Basic than the other way around.
4) Upward or downward membership?
With strategies, you usually find it to offer its subscribers the cheapest possible variant at first and then subsequently have more expensive offers. However, if you choose to set up a smaller exclusive club for a limited amount of subscribers, you can pick a business strategy that we’ve invented here at Genusio and coined the ‘cross-out model’. Unlike the first variant, subscribers see the most expensive possibility with a complete list of offered services straightaway. With every decrease in price, they see which services are taken away from the package.