The Rise of Subscription-Based Marketing Services

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Yelena Petic
July 26, 2022
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‘The average subscription billing vendor is growing 30%–50% annually’

The subscription agency business model has seen a massive rise in popularity in recent years, and there is a considerable reason. The subscription-based economy grew by 350% between 2012 and 2019. Subscription businesses grew revenues about five times faster than S&P 500 company revenues during that time.

We have all seen and read the headlines from last year to now, from Nike to Coca-Cola, businesses across all industries are increasingly turning to subscriptions to set their businesses up for future growth and success.

‘By 2022, 53% of all software revenue will be generated from a subscription model’

Businesses selling goods, services and digital products of all types and styles have turned to this business model as a way to attain and secure repeat customers. 

This marketing tactic involves a different approach to traditional digital marketing, take a look below and let us help you break down the benefits of subscription-based marketing for both your customers and your business.

Peace of mind for your Business

  • Convenience is a huge appeal for this business model. Consumers today can go shopping for groceries, purchase a car, upgrade their entire wardrobe, redecorate an office or living space and access the latest digital entertainment all without leaving their house. In the non-stop, fast-paced online economy, products or services that offer quick-and-simple solutions for customers are the most successful.
  • Savings is a huge benefit to customers, and subscriptions are typically offered at discount. Businesses will often sell subscriptions at a discounted price, making it cheaper to buy products or services via subscription than making the same purchase as a one-off. Birchbox sells beauty products via subscription for less money than it would cost to make an instore purchase. Offering lower prices is an easy and efficient way to get new customers to try out a subscription offering. 

‘More than half of online shoppers (54%) say they subscribe to a subscription box service. The subscription box industry appeals to consumers’ desire for convenient, novel experiences.’

  • Top up, customers often buy subscriptions simply because they repeatdely need to replenish a product or service. This applies to many digital and physical products. Toiletries, groceries and digital services are all excellent candidates for subscriptions.

A flawless user experience is already becoming more relevant to customers than the product, service, and the price that comes with it. Starting with intuitive interfaces and mobile optimization and ending at frictionless checkout, 2020 is going to be a year of chasing impeccable subscription user experience.

One of the greatest benefits of subscriptions is that they do not require the customer to make a decision every single time. This leads to predictability and consistent revenue for ecommerce brands in the long run. The anticipation along with ultimate convenience has fueled the adoption of subscription buying.

‘Amazon offers faster shipping times and other benefits to Amazon Prime subscribers, with subscription revenues netting the company $19.21 billion in 2019.’

Why YOU will Love It.

  • Subscription-based pricing attracts more customers and lowers the barrier to entry for products and services, this allows more potential customers to purchase your product or service. Your customer can get immediate access to the desired product or service at an attainable price. They also enjoy the increased benefits you can provide as your business grows and you improve your product or service over time. Since you are not impacted by the cost of shipping items and may have the flexibility to accept all kinds of payments, global markets are easier to reach.
  • Recurring billing offers predictable revenue. When you are operating a ‘pay once’ model, you must constantly attract and convert customers in order to earn revenue. This can be expensive and can cost you a lot of lossed income if your business performs poorly for a month. A subscription-based business model allows customers to make payments to your business on a regular basis. Since the amount of recurring payments is decided on at the time of initial sale, it enables you to predict your revenue each month.  Billing automation creates fewer gaps between billing cycles which helps to plug revenue leaks.
  • You can earn more through up-selling and cross-selling. This is due to having continuous contact with your customer base and the fact that you are building a strong bond of trust. This makes it easier to market additional and complementary products or services. Upsells are usually easier with a subscription business since the customer has a prior relationship with your business and will be receptive to any added value you can provide. Once subscription fees have become a part of customers' expected budget, it will become easier for them to see additional features as more affordable. This is especially true for customers using your subscription to learn or grow, who may find that add-ons enable them to achieve their goals more efficiently. Customers also benefit from the fact that the product or service is constantly up-to-date. This will allow them reduced time-to-value for any new features implemented in the product or service.

‘70% of business leaders say subscription business models will be key to their prospects in the years ahead’

Marketing tactics to help market your subscriptions

  • Data-driven marketing and sales have become keywords and there is a good reason. 79% of top-performing companies have been using marketing automation tools for years now. The same applies to subscription management, choosing a payment service provider that keeps up with the market dynamics and constant changes enables you to track subscriber data and convert it into actionable information. Well-designed subscription management software  provides you with the information on which subscription plans are the most popular and what overall revenue they generate. Such metrics help businesses understand the reasons behind subscriber churn rate, which is said to be the biggest challenge of subscription-based businesses.
  • Even More Focus on Retention. Subscribers are a special kind of customer, they are way more loyal, more emotionally tied to your brand and generate higher revenue throughout their lifecycle. To make this all come true, your business must take care of them with a special finesse. On the subscription market, customer retention becomes more relevant than the acquisition. So take the time, collect the data and get to know who your customer really is. You must have an understanding of what they really want and need out of the products or services your business is offering.
  • Loyalty Programs are here to stay. Rewarding users for recommending products or staying loyal to the brand is becoming a standard among subscription-based companies. Both the recommenders and new customers receive an incentive for opening a new account. Loyalty programs reward users for staying with a company and not switching to competitors and are often accompanied by gamification. Both of them are an effective and smart  subscriber retention tool.  Loyalty programs are a typical marketing tool, but they are highly effective. 70% of consumers are willing to recommend a brand due to its loyalty program.
  • Focus on differentiation. One of the most efficient ways to carve out a section of the market is through differentiation. Differentiating your products or services  from what your competitor is offering will better establish your brand and help you stand out from the crowd. There are many ways to tweak and adjust what your brand is about. Having a solution for your customer is one of the best ways to stand out, knowing your customer better than the other guy is the key factor here. Subscription-based buying is becoming more competitive than ever before, using a digital marketing team with extensive knowledge in subscription-based marketing can really advance your brand position.


Subscription-based services will grow in any economy, just look at where the world is now. The coronavirus has affected the global economy and people worldwide are still, continuously, making purchases on a daily basis. Any slowdown in business or consumer spending in 2020 will only increase the real competition among subscription-based businesses and drive non-subscription companies to convert to meet new consumer demands for services.

Retaining and growing active subscribers is the key to succeeding in any economic state and  it is these businesses that provide subscription-based services that will ultimately win in the end.

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