How can you help a financial services company develop a subscription-based business model?

Two of the key problems that financial services companies are solving is simplifying how the money is moving between different parties & ease of investing. Today’s world is a tech driven world, so to build any subscription based model, the objective should be to first make the shift towards a tech driven platform with the current service offerings and then driving a subscription based model becomes much easier.

Assessing the current situation is NOT the first step as it will consume time and resources to do. The first step is determining whether a subscription model fits within the organisation's strategy and, if it doesn't, whether there's any appetite to have a subscription model (and change company strategy).

The fundamental pillar to help a financial services company develop a subscription-based business model is for the company to be clear about why this and not something else is what it should achieve. In addition, they must show willingness to be helped and follow the process determined to achieve the established goal, and of course total transparency in their actions. The key for this business model to work (value proposition) is for that market segment, it is a fundamental need to be subscribed and a significant risk not to be.

Assist in identifying valuable subscription offerings, pricing models, and customer benefits. Analyze market trends, competition, and customer preferences. Provide guidance on building a seamless subscription platform, effective marketing strategies, and ongoing customer engagement to enhance retention and revenue streams.

I would start with a discussion with the owners & management first. Building up a subsription based service and successfully running it on a market is a really complex thing to do - not just when building it up, also in maintenance. It is very cash-demanding (for years!), needs a solid technology platform, and before doing anything; serious market data + calculation should show it is worth doing in the first place. Just after this step, other things can come. This would be a serious strategic project for that company and should be treated this way in all its aspects (extending the lenght of this comment).

Definir lo que está buscando el cliente, si la competencia lo está brindando satisfactoriamente y nuestra capacidad para ofrecer propuestas superadoras. Si la competencia está brindando el servicio satisfactoriamente, evaluar si hay mercado para un nuevo competidor, ya sea que se quiera brindar el mismo servicio o una nueva propuesta. Si la competencia este brindando no satisfactoriamente, evaluar la razón y si nosotros podemos ofrecer una propuesta superadora. Si no hay competencia, analizar más variables del contexto, preguntarse la razón e ir indagando esta línea, evaluar dificultades de abrir un mercado, iniciando con propuestas de rápido acceso para ir sumando variedad y segmentos específicos a medida que fidelizamos.

1) For a subscription financial services business 'Micro-transaction' / 'Fast-Money' transactions has to be clearly aligned to the market potential and problem that's been solved for the end user. 2) Unit Economics strategy has to be worked on upfront and linked to the Value proposition. 3) For any pay per use model Experience is not just a differentiator but could be the value proposition itself.

Probably the most important bit as the core challenge is in monetisation which necessitates a deep understanding of the market and potential client base. Pitch too high and little uptake, pitch too low and no profit. Consider Freemium to Premium but transition is incredibly hard to get right!

La definición de la propuesta de valor para cada tipo de cliente es fundamental, establecer claramente el beneficio tangible e intangible que obtienen con la suscripción. La relación costo por suscripción y beneficio generado debe dar como resultado una relación positiva, para lograr que el producto tenga la aceptación y crecimiento deseado. Finalmente un punto fundamental es entender que problema o necesidad estamos logrando solventar con este servicio por suscripción, que dolor logramos reducir o eliminar; con lo cual podamos generar valor para los clientes.

Identify Key Benefits: Clearly articulate the benefits that subscribers will receive. This could include cost savings, exclusive services, personalized financial advice, or other value-added features. Customization Options: Explore opportunities to provide customization within subscription packages, catering to different customer needs and preferences. Communicate Value: Develop a compelling communication strategy to effectively convey the value proposition to existing and potential customers. Highlight how the subscription model addresses their financial goals and challenges.

Collaboration with strategic partners can be pivotal in this model, enhancing value delivery. Also, pay special attention to the pricing strategy, ensuring it reflects both the value provided and market expectations.

Para dise?ar un negocio que comienza, primero se debe definir objetivos Principales y Generales: Resolver una determinada situación u ofrecer un determinado servicio/producto, y si se prioriza rentabilidad, crecimiento, o ambas. Luego incorporar en base a disponibilidad y necesidades, valores, estándares de calidad, regulaciones, financiamiento, estructura, recursos, sistemas, proveedores, factores externos, riesgos, etc., que nos permitan dise?ar el modelo inicial y su evolución proyectada. Es importante incluir objetivos medibles de corto y mediano plazo para evaluar su cumplimiento, la evolución del negocio y así realizar los ajustes necesarios.

For business model design I am using one of the well known frameworks forcing the team to have a 360 view - business model canvas. Nowadays we have multiple options to define it including virtual collaboration. This exercise lays out Key partners, activities and resources along with customer segments, relationship and value proposition. Cost and benefits are also part of this exercise. The secret ingredient i am using on top of is a change management framework aimed to understand key communication plans tailored to audience and wherever needed training needs assessment to secure common ground for new model.

Subscription-based financial services charge a regular fee for access to financial services. They include the following: 1. Budgeting tools 2. Financial advice 3. Investment platforms 4. Credit monitoring services Subscription-based financial services provide a recurring revenue stream, making it easier for FIs to estimate revenue and plan accordingly. They also allow them to reach a broader audience, particularly younger clients (say,Gen Z) who may not have the financial means to access traditional services. While these models offer advantages(predictable revenue streams & increased customer retention) , they come with their fair share of problems : 1. Costly Fees 2. Limited customisation 3. Inflexibility 4. Lack of transparency

Pricing Strategy: Determine the pricing structure for subscription packages. Consider factors such as the perceived value, competitive landscape, and willingness to pay. Explore tiered or freemium models to provide flexibility. Contract Terms: Define the terms and conditions of the subscription model, including contract duration, renewal options, and any exit clauses. Ensure transparency and fairness in contractual agreements. Legal and Compliance: Ensure compliance with regulatory requirements and legal standards associated with subscription-based financial services. Seek legal counsel to navigate any potential challenges.

Technology Integration: Upgrade or integrate the necessary technology to support subscription billing, customer management, and analytics. This may involve adopting subscription management platforms. Employee Training: Train employees on the new business model, emphasizing the value proposition and how to effectively communicate it to customers. Ensure that staff is equipped to handle customer inquiries related to subscriptions. Marketing and Launch: Develop a comprehensive marketing strategy to promote the new subscription-based services. Utilize various channels to create awareness and generate interest among existing and potential customers.

El momento de implementar el cambio es cuando se está en punto exitoso de la empresa, cuando parece que no es necesario realizarlos es cuando el líder tiene más fuerza para anticipar y realizar los cambios que serán beneficiosos en la próxima etapa. Para esto es muy importante la comunicación y la repetición, como un evangelizador del cambio propuesto. Se recomienda trabajar en equipos, detectando quienes apoyan el cambio, para trabajar con estos, dándoles visibilidad y espacio.

In this phase, storytelling becomes a powerful tool, painting a vivid picture of the subscription model's future impact to inspire and motivate all stakeholders. Gamify the rollout process to create an engaging and interactive experience for staff, fostering a sense of ownership and excitement. Leverage digital platforms for real-time tracking and analytics, allowing for agile adjustments based on user engagement and feedback. Create a buzz in the market through innovative marketing strategies, highlighting unique features and benefits of the subscription model. Finally, establish a dedicated task force to monitor the transition, ready to tackle unforeseen challenges and capitalize on emerging opportunities.

é necessário refletir se já se trata de um negócio em opera??o e que fará uma oferta complementar por assinatura mantendo também a op??o tradicional, ou uma substitui??o o que envolveria uma plano de transi??o que n?o permita a “quebra” de carteira. Como um novo negócio atentaria ao “Fit” em rela??o as dores doa segmentos de clientes idealizados.

A team to roll out the change must be selected very well as there are three critical resources to Manage and Operationalise the Company's Operational Plan and Budget namely The Manpower, The Money and The Materials in a cost effective manner. This change should be made through known, trued and tested business processes for accountability and transparency that ensures Expected Results within the industry standards

Evaluation of results must NOT just be limited to churn rate, acquisition and other metrics that assess YOUR profitability but also MEASURING value delivered to the CUSTOMER. If there is no customer centricity, there will be no brand loyalty. And we dare not start with the premise that there is no brand loyalty anymore. That is, if you can excuse my French, absolutely foolish.

Cuando evaluamos resultados de un negocio por suscripción es importante evaluar a largo plazo, sin descuidar los costos fijos. No es la venta de un producto, es una relación comercial que se espera dure en el tiempo, por lo que la amortización de la inversión inicial y la inversión de tomar un cliente se tiene que medir también a largo plazo y muchas veces se debe priorizar el mantener el cliente por sobre obtener la mayor rentabilidad de corto plazo. Es común en los negocios por suscripción que los resultados positivos no se vean en los primeros a?os, ya que se invierte mucho en agrandar la base de clientes.

Performance Metrics: Establish key performance indicators (KPIs) to measure the success of the subscription model. Monitor metrics such as customer acquisition, retention rates, and revenue generated from subscriptions. Customer Feedback: Gather feedback from subscribers to understand their satisfaction levels, gather insights for improvement, and identify areas of success.

To evaluate results a good use of change management identified governance will provide necesarry bood stream to success. Weekly/Monthly (sometime daily standup) short and effective meetings looking at adoption dashboard as suggested in step 4 and focusing on big whys and actionable support required can expedite the process. Lessons learned along the way as well and future tunning of processes/services will be required.

Give this time! Most startups need 7 iterations to get a stable service. Be ready to pivot. Give the team space to evolve the service. Its better to fail at a great service, than to make service survive that will kill the team or does damage to the brand.

Fomentar y mantener relaciones, con clientes, proveedores, colegas, colaboradores y educadores, es la mejor manera de aprender y poder adaptarse rápidamente al contexto, nos va a permitir ser asertivos en el rumbo y las propuestas que generemos, mientras que a su vez nos capacita y nos fortalece dentro de la comunidad.

Iterative Improvement: Based on the evaluation results, continuously refine and optimize the subscription model. This may involve adjusting pricing, enhancing features, or introducing new subscription tiers based on market feedback. Market Trends: Stay informed about industry trends and emerging customer needs. Be prepared to adapt the subscription model to align with changing market dynamics.

You need monitoring of trends: Digitalization: Increasing reliance on digital financial solutions. Sustainability: Growing demand for sustainable and ethical financial services. Technological Innovations: Integration of new technologies for enhanced services. Globalization: Expansion into international markets for a broader customer base. Regulatory Changes: New regulations could impact business models. Cybersecurity Risks: Rising threats necessitate robust security measures.

1. **Market Research:** - Continuously analyze market trends and customer preferences in the financial services industry. - Adapt the subscription offerings based on emerging needs and competitor strategies. 2. **Customer Feedback:** - Collect and analyze customer feedback regularly. - Use insights to refine and enhance subscription services to better meet customer expectations. 3. **Data Analytics:** - Leverage data analytics to understand customer behavior, preferences, and usage patterns. - Use data-driven insights to optimize subscription plans and pricing structures. 4. **Competitor Analysis:** - Monitor competitors in the financial services sector.

Adaptability is one of the keys to success within process, as your client's happiness is paramount to the subscription model. Learning from the data you have forms an important base to assess what your client like and use the most. This provides a great learning platform to further develop offerings that add value to clients. Retrospectives become powerful tools to help in your learning to adapt the process and offering to maximise value for clients. Happy clients means a longer subscription times. Identify if yearly subscription discounts mean more to your target market compared additional value or services. In a world that is rapidly embracing Digital Transformation, learning about your client and adapting is crucial.

“In the subscription based advisory (financial product) business ; Most will fail !! Not because there is no market ; but because sellers see value where there is none!!” Product spectre, a cool User interface, Research Reports, Econimist point of view, your Degree, online presence , are all hygiene factors now. Mandatory to do business but do not excite the customers. The next wave is all about personalisation. It’s all about understanding (& forecasting ) customer needs This is where 99 % of businesses are speaking generic like child’s education. A few participants are working on personalised services factoring multiple factors of the clients life cycle within cash flow prediction. Those are winners of tomorrow.

To assist a financial services company in developing a subscription-based business model, start by understanding their core services and identifying potential subscription offerings. Conduct market research to determine customer needs and preferences. Design subscription packages that provide value, convenience, and flexibility. Implement robust billing and payment systems while ensuring compliance with financial regulations. Develop a customer communication strategy to promote the subscription model and emphasize the benefits. This approach will not only drive recurring revenue but also enhance customer loyalty and engagement in the dynamic landscape of financial services.

I would conduct a thorough analysis of their offerings, customer needs, and industry trends. I would recommend identifying key services suitable for subscription-based packages, ensuring they provide ongoing value to clients. For example, introducing subscription-based financial advisory services, bundled with exclusive reports, market insights, and regular consultations. Implementing a tiered pricing structure can cater to different client needs. Additionally, crafting a compelling marketing strategy that highlights the long-term benefits of the subscription model and emphasizes convenience and added value will be essential.

Something else to consider is gamification. This can add tremendous excitement to subscription based services and can also double up as a useful marketing tool. Tiering levels and rewarding people for certain achievements can boost clients' morale and will also get them talking to people about the service. Huge opportunities can be unlocked through gamification.

Lots of references to business model in this article but nothing that explicitly mentions the organisations operating model. The operating model will have to change to enable and support the revised business model. If you don't know what an operating model is or don't understand how it will need to change, DM me.