The subscription agency business model has seen a massive rise in popularity in recent years, and there is a major reason behind it. The subscription-based economy grew by 446% between 2012 and 2021. Subscription businesses as a whole are sitting at an average of $22.7 billion in sales and that number is expected to grow to $66 billion by 2027.
Did you know the average subscription billing vendor is growing 30%–50% annually?
We have all seen and read the headlines from a few short years ago to the present day. From global corporations like Amazon to Apple, businesses from all industries that are selling goods, services, and digital products of all types (coffee, makeup, shaving kits, snacks, dog food, etc,) and styles have turned to this business model as a way to attract and attain repeat customers.
This genius business model involves a different approach to traditional digital marketing, take a look below and let us help you break down the benefits of a subscription-based business model for both your customers and your business.
1. Subscription-Based Model = Peace Of Mind For Your Business

Did you know more than half of the online shoppers say they subscribe to a subscription box service? This is because the subscription box industry appeals to a consumer’s desire for convenient, novel experiences
Convenience is a huge attraction for this business model. Today, consumers can shop for groceries, buy a car, upgrade their wardrobe, redecorate a home or office, and watch digital entertainment without leaving home. In the 24/7, fast-paced online economy, any products or services that are offering quick and simple solutions for consumers tend to be the most successful.
Savings is another huge benefit to consumers, and subscriptions tend to be typically offered with a discount. Subscribers are often sold at a discounted price, making them more affordable than making a one-off purchase. Subscription services like Birchbox sell beauty products at a lower cost than buying them in-store, there is a lot of value in that to a customer. Offering lower prices is an easy and efficient way to get new customers to try out a subscription offering.
In many cases, customers buy subscriptions simply because they need to replenish products and services repeatedly. Toiletries, groceries, and digital services are all excellent candidates for subscriptions.
One of the greatest benefits of subscriptions is that they do not require the customer to make a decision every single time. As a result, eCommerce brands can expect predictability and consistent revenue in the long run and subscription buying is becoming more and more popular because of the convenience and anticipation it brings.
2. Why Business Owners Will Love The Subscription-Based Model

Did you know 70% of business leaders say subscription business models will be key to their prospects in the years ahead?
In addition to attracting more customers and lowering the barrier to entry, subscription-based pricing allows more potential customers to purchase your products and services. Your customer can get immediate access to the desired product or service at an attainable price.
They also enjoy the increased benefits 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 is another added benefit of this business model. When you are operating your business this way you constantly attract and convert customers and earn revenue. A subscription-based business model allows customers to make payments to your business on a regular basis.
By determining the number of recurring payments at the time of the initial sale, you are able to predict your monthly revenue. By automating billing, revenue leaks can be plugged in since there are fewer gaps between billing cycles. You can earn more through up-selling and cross-selling. You build a strong bond of trust with your customer base when you have continuous contact, and this makes it easier to market additional or complementary services or products.
A subscription business usually makes it easier to upsell because the customer already knows you and will be receptive to any additional value you can provide. Once subscription fees have become a part of customers' expected budgets, they will see additional features as more affordable.
3. Marketing Tactics To Help Market & Grow Your Subscription Offerings
Data-driven marketing and sales have become keywords and there is a good reason. 80% of top-performing companies have been using marketing automation tools for years now. With subscription management, you can track subscriber data and turn it into actionable information by choosing a service provider that keeps on top of market dynamics and constant changes.
Subscription management software provides your business with information (data) on which subscription plans are the most popular and what overall revenue they are generating. Such metrics help businesses understand the reasons behind subscriber churn rate, which is one of the more challenging aspects of subscription-based businesses.
Subscribers are a unique type of consumer, they are much more loyal, and definitely more emotionally connected to your brand. They also generate higher revenue throughout their individual lifecycle. Your business must take care of them with a special type of finesse.
You need to take the time to collect the data and get to know who your customers really are. You must have an understanding of what they really want and need out of offerings and make sure you are providing them with the solutions they need on all levels. Providing a great UX and CX is key here. You want to make sure the transition from browning to check out is smooth and simple (and nice to look at) as well as providing outstanding customer service.

Loyalty Programs are also great marketing tactics to use in the subscription model. Rewarding customers for reviews and recommendations help to keep customers loyal. You can offer discounts, promos, free gifts with purchases, etc, and did you know 70% of consumers are willing to recommend a brand due to its loyalty program?
Focusing on differentiation is one of the most efficient ways to carve out a section of your market. Establishing your brand and standing out from the crowd is easier when you differentiate your products or services from what your competitors offer. This could be in the site itself, its UX, its content, its promises, and its customer service. This goes back to us researching your customer and your competition and figuring out where you need to make improvements in order to stand out from the competition.
In Conclusion
The subscription-based business has become a competitive arena where businesses battle for the top spot in their respective markets. The competition is greater than ever before and subscription-based goods and services will continue to grow even in the current economy, just look at where the world is now. Retaining and growing active subscribers is the key to succeeding in any economic state and businesses that provide subscription-based services that will ultimately win in the end.
Using a digital marketing team with extensive knowledge in subscription-based marketing can really advance your brand position. Any slowdown in business or consumer spending in 2023 will only increase the real competition among subscription-based businesses and drive non-subscription companies to convert to meet new consumer demands.