[{"@context":"http:\/\/schema.org","@type":"Article","@id":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#Article","articleBody":"After spending the last six months working on subscription models innovation and new subscription functionality for hybris software\u2019s Commerce Suite, I was sure I had a good handle on what businesses are offering as subscription products.\nYet I continue to come across new ways that various enterprises are using subscriptions to advance their businesses.\nSubscription models innovation: Taking businesses to new heights\nFor example, United\u00a0Airlines has launched subscription options that offer customers access to Economy Plus seating, or allow them to sign up for an annual subscription for pre-paid checked baggage charges. From The Huffington Post:\n\u201cThe Economy Plus and\u00a0checked baggage subscriptions\u00a0offer our customers more of the comfort and convenience they value year round,\u201dstatedScott Wilson, United\u2019s vice president of merchandising and e-commerce, in a recent press release. \u201cWe are pleased that, as we launch these services, we are able to provide new options for customers to tailor their travel experiences.\u201d\n \nHow the subscription commerce model is driving a DTC retail boom\n   DTC retail is booming thanks to the subscription commerce model. Learn the benefits of these models and which model is best for your business.  \nExamples of subscription models innovation\nSubscriptions are common when selling access to products or services. Some examples of subscription models innovation:\nDifferent types of media, like news, music, Software as a Service (SaaS), or software upgrades for downloadable packages.\nTelcos subscribe customers to a variety of service plans, bundling them with subsidized smartphones.\nNewspapers are following suit by offering a subscription to online editions bundled with an e-reader device like the iPad mini or Kindle.\nIn B2B commerce, warranties and service plans are also often offered as subscriptions.\nDon\u2019t think of subscriptions simply as recurring billing. It\u2019s better to see them as a way to maintain an ongoing relationship with your customers. Multiple events, not all of them transactional, happen in the course of that relationship.\nThey vary from customer registration to providing payment details to charging initial or recurring fees, or charging a fee based on usage. As with any successful relationship, it goes both ways. Businesses may offer additional incentives to access service, like a free trial, a reduced price on the first few purchases, or free credits for referring new customers.\n \nSubscription business models: Start small, plan big, reap rewards\n   70% of organizations are deploying subscription business models to sell directly to consumers, thereby creating recurring revenue and customer loyalty.  \nBenefits of subscription models\nCloser customer relationships give businesses numerous opportunities to learn how customers interact with enterprise products, and they help businesses reach customers through multiple touchpoints with relevant offerings of additional products and services.\nThe attractiveness of the subscription business model also lays in its multidimensional flexibility. When selling a regular product, the only dimension in a merchant\u2019s arsenal is the price. There are of course multiple ways to offer a discount, but in the end, it all comes down to how much a product costs when it is added to the shopping basket.\nSubscriptions provide multiple benefits and degrees of flexibility when defining a merchant offer.\nIn addition to recurring and one-time charges, non-monetary parameters come into play \u2013 for example, subscription duration, cancelation terms, how often billing occurs (including billing dates), and entitlements that determine what\u2019s included in an offering vs. usage charges.\nWith so many degrees of flexibility, there are no limits to creativity and experimentation.\nYou can choose a registration fee and a recurring monthly charge.\nYou can use a free trial with automatic conversion.\nYou can charge a flat fee with unlimited usage.\nOr you can apply per usage charges only.\nUnited Airlines created separate subscription plans for North American and international travelers, added charges for the second extra bag, and a one-time initiation fee (which is currently waived). In addition to the entitlement of extra luggage, United offers more leg room. Who wouldn\u2019t like that?\nWith so many ways to modify its subscriptions, I\u2019m sure that with time United Airlines will find a combination that appeals to the whole of its customer base.\nBusinesses should look to subscription models innovation and adoption for flexible commerce tools to define attractive plans and manage subscriptions, to implement a billing system with recurring and per usage charges, and experiment with different offerings until they find one that clicks with their customer base.\nShifting retail landscapes. Varying buying behavior. What makes people click \u201cbuy\u201d? We\u2019ve got the answers HERE.","author":{"@type":"Person","@id":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#Article_Person","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#Article_Person_ImageObject","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/uploads\/2014\/10\/MichaelVax_WP-bio-150x150.jpg"},"name":"Michael Vax","sameAs":["https:\/\/twitter.com\/MichaelVax","https:\/\/www.linkedin.com\/in\/michaelvax"],"url":"https:\/\/www.the-future-of-commerce.com\/contributor\/michael-vax\/"},"dateModified":"2021-04-22T14:37:53+00:00","datePublished":"2013-06-19T05:00:30+00:00","description":"Subscription models are continually driving innovation. Subscriptions offer opportunity to form lifelong relationships with customers.","headline":"Subscription models innovation guide: Examples, benefits","image":{"@type":"ImageObject","@id":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#Article_ImageObject","height":"630","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2013\/06\/Subscription-models-innovation-1200x630.jpeg","width":"1200"},"mainEntityOfPage":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/","name":"Subscription models innovation guide: Examples, benefits","publisher":{"@type":"Organization","@id":"https:\/\/www.the-future-of-commerce.com\/","additionalType":"https:\/\/www.wikidata.org\/wiki\/Q1193236","description":"Relevant, timely information & analysis on commerce trends, both consumer-facing and B2B.","logo":{"@type":"ImageObject","@id":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","height":"96","url":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-new-2x.png?_=1","width":"500"},"name":"The Future of Customer Engagement and Experience","sameAs":["https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/www.the-future-of-commerce.com\/feed\/"],"url":"https:\/\/www.the-future-of-commerce.com\/"},"url":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#Article"},{"@context":"https:\/\/schema.org\/","@type":"BreadcrumbList","itemListElement":[{"@type":"ListItem","position":1,"name":"2013","item":"https:\/\/www.the-future-of-commerce.com\/2013\/#breadcrumbitem"},{"@type":"ListItem","position":2,"name":"06","item":"https:\/\/www.the-future-of-commerce.com\/2013\/\/06\/#breadcrumbitem"},{"@type":"ListItem","position":3,"name":"19","item":"https:\/\/www.the-future-of-commerce.com\/2013\/\/06\/\/19\/#breadcrumbitem"},{"@type":"ListItem","position":4,"name":"Subscription models innovation guide: Examples, benefits","item":"https:\/\/www.the-future-of-commerce.com\/2013\/06\/19\/subscription-models-innovation\/#breadcrumbitem"}]}]