Subscription-based services provide advantages for both businesses and the end-users. Even in the B2B space, monthly subscriptions continue to gain popularity due to their efficiency and predictability. In this post, Bayou Bookkeeping & Tax Service covers why the model works. Consequently, we hope this helps you determine whether the approach makes sense for your business model.
Historically, companies focus their marketing efforts on the products and services they provide. More specifically, companies may focus on value creation or features that create value for their audience. Now, that's not to say that those things don't have a place in today's world. However, competing in today's market often means personalizing your offerings to be customer-centric instead of product-centric. Thus, subscriptions yield positive results for the businesses that offer them, including.
• Efficient monetization of your services and products.
• Accurate cash flow and revenue projections.
• Increased customer retention.
• Less volatility for seasonal businesses.
The beauty of subscriptions lies in the fact that they are mutually beneficial. We just touched on how they support your business. Now, we'll take a look at how they benefit your customer.
• Lower upfront costs.
• Greater access to features and options they may not consider otherwise.
• Control over scale.
• Ability to easily pivot or switch providers.
• Potential cost savings over their customer lifecycle due to pay-per-use/access.
The subscription business model, along with digital payments, continues to encroach on traditional business models. If you are a cash business, especially, you may want to explore subscription options to keep up with the times. However, moving to this model requires collaboration and integration with all business uses and disparate systems. To that end, here are some things you must do to ensure a successful rollout:
• Ensure you've accounted for all costs from appropriate areas (billing, collections, sales, etc.) into your price.
• Consider a subscription bouquet, which provides a variety of options for customers to choose from.
• Provide appropriate access to the finance team in real-time, and understand revenue is generally realized before service.
• Consider your process flow as you adjust your operations. Update workflows to account for revenue recognition and forecasting.
• Prepare for greater collaboration, transparency, and efficiency among internal stakeholders.
• Integrate disparate systems as much as possible (ERP, CRM, billing, etc.).
• Account for any changes to your reporting, taxes, compliance, payment processing, invoicing, and other operations.
At Bayou, we serve a variety of businesses in Baton Rouge, Central Greenwell, Livingston, and beyond. If you're curious how a subscription-based services model will impact your bookkeeping and accounting, we can help. Moreover, we offer subscription-based plans so that you can reap the benefits of the model yourself. Call (225) 442-1137 to learn more information, or request a consultation online.
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