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Subscription-based business models are enjoying growing popularity among eCommerce stores. There are several types of subscription models that a store can offer its customers, and the benefits of such models are great. From creating a predictable revenue stream for your business to rewarding customer loyalty, subscription models allow you to connect with your customers by creating ongoing relationships rather than one-time transactions. So, what are the benefits of subscription models?

1. Better Access for Potential Customers

Buying is often an emotional decision and paying a smaller amount a month, let’s say $15 to $30 is more appealing to shoppers than a higher one-time purchase of several hundred dollars. Psychology comes into play here. It feels like much more of a commitment to spend a large amount of money once rather than smaller amounts spread out over regular intervals.

As well as psychology, affordability is another factor. Many customers would not be able to afford a large purchase and by not offering access to your products, you are essentially dismissing a whole segment of potential customers. 

2. Predictable Revenue For Your Business

With a subscription-based business model, you have better insights into your revenue and predict how much your business will take in each month. Since customers make payments on previously agreed dates, you will always know your projected revenue.

3. Personalization and Cross-Selling

With a subscription model, you will get to know your customers’ shopping habits and product preferences. This data is invaluable because it allows you to then personalize product suggestions based on what your customers like. Building relationships also becomes easier, as you can choose to institute loyalty programs that reward customers for their commitment to your business.

Types of Subscription Business Models

There is no one-size-fits-all when it comes to creating a subscription model for your store. It depends on the products you sell and the capacity you have to deliver them.

1. New or Recurring Products at Regular Intervals

In this model, a customer subscribes to have either the same product or similar products from the same category delivered at regular intervals. Make-up and wellness sellers may opt for this choice. As we mentioned earlier, buying is often an emotional decision. A customer feels assurance when they know the product they’ll receive comes from a category they favor, while not knowing exactly what it will be adds an element of surprise.

One of our clients, Horseguard, sells horse supplements, which horses need on a regular basis. We created a custom calculator that allows clients to customize their orders based on the number of horses and their weights. They can choose how often the horses will be taking the supplements and the size of the supplement bag, which then suggests how often the product needs to be delivered.

2. The Subscription Box Model

In this model, a customer selects the products they want to be delivered weekly, monthly, or at whatever frequency you want to offer. They can amend the products in their box before delivery and have a lot over control of what they’ll receive and when. 

This type of model is favored by companies that offer food and recipe boxes because it allows their customers variety and convenience. One such example is Farmivore, a customizable farm box and local veggie delivery in Ventura County, CA. that uses one of our custom Build-a-Box solutions. Their customers can add and remove items and edit quantities from within the Build-a-Box and can choose the frequency that their subscription orders will be delivered.

3. Membership for Unlimited Access

This subscription model allows customers to pay a monthly subscription fee which gives them premium access to content. A great example is Knit Collage – a yarn and knitting store that in addition to selling products also has a premium access area that gives subscribers tutorials and video lessons. We created a custom loyalty program by integrating our WS Loyalty App into the back-end of Knit collage’s site, where it tracks paid member’s purchases and automatically adds monthly points that can be redeemed towards purchases.

How Westmount Solutions Can Help

If you are thinking of creating a subscription for your store or services, talk to us! We can recommend the most appropriate model for your business and create a custom solution that benefits your store and your customers.

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Tatiana Dudin

Tatiana is passionate writer with over 10 years of experience writing for the tech industry.