One-time sale vs subscription model has become a hot topic in business world for the past decade. Regarding the two models, which is preferable for customers and more profitable for business?
The answer to the question is, arguably, the subscription model. Accordingly, the conventional one-time sale is so yesterday and, currently, the consumers are shifting to subscription.
To clarify the difference, let us explore the definition first. In short, one-time sale is buyers buy a product once and they own that particular product, thus when the new one get out they cannot have or try the new one apart from buying again.
Subscription, on the other hand, allows consumers to ‘rent’ a product and service, making they do not own it. However, when a new product emerges, they can try and use it thanks to subscription.
Despite being a hot topic of discussion numerous times, many business leaders appear to reject the idea of subscription. While subscription model cannot obviously apply to any form of business, to some applicable field, however, it is beneficial.
Even big businesses, Microsoft for instance, are greatly their subscription sales. Having two newly-released products, Office 2019 and 365 respectively, Microsoft encourages their consumers to buy their subscription-based service, Office 365.
Considering the example, what makes subscription more advantageous these days? Here are the reasons why subscription is advantageous and, thus, why business should embrace this model.
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Cost Efficiency
The very first reason is the cost efficiency. Unlike one-time sale, subscription model allows more cost efficiency for customers and sustainable incomes for business. As an analogy, an all-time popular song is always better than a one-hit wonder.
In addition, subscription brings an income continuity, mostly every month, hence making companies easier to assess the incomes and outcomes they have every period. For customers, it will help them to manage their money in making a purchase which will reduce the number of piracy in the long run.
Better Services and Updates
In the digital era, update is no longer a foreign term. A service or a product always requires frequent updates to minimize faulty and enhances performance. This is what subscription model is obviously winning.
Besides, customers often face difficulties in using a service or product. If the difficulties revolve around imperfect or error products, companies can directly update it for a better service. At the end of the day, this connects companies better to customers and builds trusts.
Flexibility and Scalability
When a company wants to make a slight revision or upgrade to their product, they do not need to invest too much time and energy in making a new one. Everything is thanks to subscription model’s flexibility and scalability.
Subscription allows more flexibility and scalability. For instance, after making a novel change to their products, companies can simply announce it as an update if they are subscription-based. However, if it is a one-time sale, they need to market it more, make a release, and any other thing that results in bigger expenses.
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