Subscriptions can enhance customer experiences and provide more predictable revenue streams for enterprises and are becoming a prominent business model in the software-as-a-service (SaaS) industry. With the impact of lockdown and now hybrid working, a growing number of companies in sectors such as automotive, airlines, gaming, health and wellness, education, and home maintenance have introduced subscription services in recent years. Disney+, Apple, Audi, at-home fitness app Peloton, Fitbit, and virtual platform Codecademy are just some examples of product or service providers that are finding success in the subscription world.
However, many Fortune 500 companies are not taking the crucial steps needed to successfully implement subscription services and make that transition to fulfill customer need. Corporations should be aware that the subscription model is much more than simply putting a monthly or annual price tag on their offering. Executives cannot simply layer a subscription model on top of an existing business without making changes to the entire operation process, onboarding all stakeholders, recalibrating strategies, and creating a subscription culture.
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While 70% of business leaders believe subscriptions will be key to their future, only 55% of companies believe they’re ready for the transition. With this in mind, companies should first address the following core issues so they can better plan their switch to a recurring revenue model.
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