How Does a Subscription Work?
Wonder how subscriptions work? Using practical examples and explanations, you will learn how the process of creating a subscription works in easy terms.
How does a subscription work?
A subscription works when a customer pays a company on a regular basis, usually monthly or annually, for access to a product or service. This is often implemented through a subscription management platform like Subscribie, or other subscription management platforms which can handle the process of subscription sign-up, billing, and management.
When a customer signs up for a subscription, they typically provide their personal information and payment details, such as credit card or bank account information. The subscription management platform will then handle the recurring billing process, automatically charging the customer's payment method at the agreed-upon intervals.
Subscription Model Process
The process of a subscription model involves several key steps which can be summarised into Subscription Plan Creation, Sign-Up and Billing, Account Management, Positioning and Growth, Analytics and Reporting, Churn Management and Upselling and Flexibility.
Subscription Plan Creation
You must first create a set of subscription plans that customers can choose from. These plans typically vary in terms of the features, pricing, and access to the products or services offered. If this is too complicated you can start off with just a single plan and add additional ones based on customer feedback and demand. Creating one plan takes less than 60 seconds when you do it on Subscribie.
Sign-Up and Billing
The customer will then sign up for a subscription plan by providing their personal information and payment details, such as credit card or bank account information. The subscription management platform will handle the recurring billing process, automatically charging the customer's payment method at the agreed-upon intervals. For instance, if you create a plan with Subscribie, Subscribie takes care of charging your customers every month and there is no need for any manual intervention.
Account Management
Once your customers have subscribed to your service, you should manage and optimize your subscription plans to cater to feedback and needs. For example, Subscribie provides tools for managing customer subscriptions, such as subscribers can update their payment information, view billing history, and cancelling or pausing a subscription. With this, you are able to customize subscriptions according to the needs of your customers and yourself.
Positioning and Growth
Making the placement of your subscription accessible is key to growth. It is important to make it easily accessible and easy to use for customers. This is best illustrated by the fact that with Subscribie, you have the ability to place your shop wherever you want, even on your existing website! You can also alternatively link to your subscribie shop if you have an existing website to let people know that they can receive your product or service as a subscription (Don't worry if you don't have an existing website, a website is automatically made for you when you sign up to Subscribie) This integration and flexibility of Subscribie allow more customers to see your page and try out your subscription.
Analytics and Reporting
Analytics and reporting in subscriptions are crucial in understanding your customers, their behaviour and preferences, and your business performance. With the right data, you can make informed decisions that help you to grow your business and improve customer retention. For instance, Subscribie provides you with the tools to track customers' subscription status and bill payments which can be used to improve customer acquisition and retention strategies.
Churn Management
Churn management is the process of identifying and mitigating the rate of customer cancellation. This can be achieved through analytics, customer engagement and customer service. One of the key components for retention is human touch. In a recent study conducted by PCW where 75% of consumers still choose to interact with a real human over automated solutions. So being in contact with customers directly is important. With Subscribie you can integrate Tawk which is a live chat platform, so you can always talk to your customers one-on-one whenever they need assistance and you can also export all your subscriber’s contact information as a CSV and have a personal connection with them.
Upselling and Flexibility
Now that you have a lot of customers, it's not the end. Let your customers know that they can make their lives easier and recommend better plans you offer. The key to gaining new customers is to offer plans that cater to everyone while allowing existing customers to upsell to higher plans. In the same way, Subscribie allows you to create an unlimited number of plans so you can create a plan catering to every kind of customer and enjoy the flexibility of editing an existing plan if needed or even creating private plans that can be used to create exclusive secret plans for your customers.
Conclusion
The Subscription Process allows companies to generate predictable recurring revenue and create a loyal customer base. It also allows companies to have a better understanding of their customer base, as they have access to customer data, preferences, and engagement. With the right strategy, a subscription-based business can be highly profitable and sustainable in the long term.
So get ready to start your own subscription today and put your knowledge of the subscription process into action with Subscribie. Not satisfied with Subscribie? Don't worry, we offer a 60-day money-back guarantee and offer a free plan to test out our subscription service. So are you willing to give it a try?