The Power of Subscription Marketing in the B2B Industry
UnboundB2B
Helping Tech companies with AI-driven marketing to deliver full-funnel, scalable solutions for sales and marketing.
Subscription plans are all over the place and we have subscriptions for almost everything. From the coffee shop next door, kids wear to the grocery and gym. Just like traditional marketing, subscription models aim to get long-term clients who will continue buying their services and keep renewing them. However, whether subscription marketing can be implemented in B2B industry and businesses is always a topic of discussion.?
Are there any subscription models that cater to business-to-business needs? Entrepreneurs worldwide are looking for innovative business models and know that subscription marketing can widely impact their strategy. So let us look at the different models and how businesses can adapt them for greater results and benefits.?
Types of Subscription Models in B2B?
There are 5 fundamental types of subscriptions in the B2B industry. They are as follows:
Saas subscriptions are generally monthly or annual basis licensing models for software like customer relationship management tools, sales performance management tools, MarTech tools, and employee management tools.?
Usage-based models work on how much a customer uses a product or service and bill them accordingly on a recurring basis. These models work on the Internet of Things connectivity to know how much a customer uses a product.?
These subscriptions are applied to product-support services regularly. This can come along with a product or can be a warranty or an upgrade to the product you brought.??
These subscriptions are on a monthly or annual charge for the use of a particular product. The laptops or PCs used in offices and other equipment along with it is an example of a product-based subscription model.
These subscriptions allow users to buy recurring business products. In this subscription, you can also curate your own box of products that you require regularly and get them in the order you need them.?
Benefits of Subscription Models?
Subscription business models have become a pivotal part of the industry and have certain benefits. Here are 4 benefits of it:
Predictive and Recurring Revenue?
Once you work consistently and collect adequate data, you will understand the number of customers you gain or lose. This information can provide a predictive analysis of the income you will be gaining or in case of loss, you will have time to implement strategies to bring in more subscriptions. This also provides a recurring opportunity for revenue collection since subscriptions are renewable.?
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Strong Customer Relationship
In traditional sales, there isn’t much communication between you and the clients unless there is an issue at any point using the products or services. Due to the recurring nature of subscriptions, you stay in constant touch with your clients, building stronger relationships with them. Also, with new upgrades and better products, these relationships stay long-term.?
Enhanced Client Retention
For B2B products or services like SaaS, the one-time fees are more expensive than subscription fees. And most times they don’t get to use the upgrades or latest features. So, clients opt for subscriptions and you can retain them for extended periods. With subscription fees being a smaller expense, they can use it and still get the latest upgrades for better results.?
Opportunities for Upselling and Cross-selling?
Subscription-based plans are flexible and provide you with the scope for upselling and cross-selling. With one-off purchases, it gets difficult to provide additions, it is feasible to provide wide options in subscription models as they can move between plans and get what works best for them. In these scenarios, clients also show a willingness to try different services and see what improves their productivity and results.
4 Subscription Business Model Strategies?
Two main reasons why subscription models are highly adaptive is because of the digital push in current markets and client demand. Here are some strategies you can implement to keep the subscriptions flowing:
Identifying the right pricing is crucial and complex. This can make or break your subscription marketing strategy. When done correctly, you get organic growth and better customer retention. Your entire pricing depends on how much value your product provides to your target audience and how well you convey it. There are many tools you can use to analyze the value of your product among your audience. Also, conducting a simple survey can aid you in recognizing the pricing and product value.???
When dealing with your clients and their requirements and pain points make sure you collect all the relevant data to make your subscription process seamless. This information will give you details of the goals your customers want to achieve or the aspect you will ease for them once they buy your product.?
Due to competition, customers expect you to provide a highly personalized product experience. So there is no one-size-fits-all option for you. Understand the stage of the buying cycle your prospect is in and then run campaigns that will bring you results and subscribers.??
Account expansion is an integral part of revenue generation. Upselling can help you with that as it can benefit both the client and the enterprise. You can upsell and customers can get the experience of premium products and services. Organizations can encourage account expansion for clients who are towards the end of the subscription plan and benefit from upsell.?
About the Orange Draft
The Orange Draft is UnboundB2B’s bi-weekly newsletter on LinkedIn that features pieces that go beyond regular blogs. We try to talk about topics that concern marketing with an exciting, unique perspective and our opinions on the same. Our aim is to build a connection with you through this medium and answer questions that come to your mind often. Let us know what concept or subject you would like to know our perspective on.?