Sales News

Is the Subscription Model Expiring?

We've all lived through the subscription boom. But is subscription fatigue setting in for buyers?

December 21, 2023

Is the Subscription Model Expiring?

We've all lived through the subscription boom. Spotify, Netflix, DoorDash, Prime––they became more than apps; they became our daily routines. But lately, whispers of subscription fatigue have emerged. (The irony of running a subscription-based sales newsletter, albeit free, is not lost on us.)

For individuals, we're quickly racking up hundreds or even thousands of dollars a year in subscription fees. For businesses, buyers––after a year or two of hearing sellers position double-digit price increases as inflation-related––are asking, "Why are we paying so much for software we don't even own (or use that much) and looks mostly the same year after year?"

Maybe it's time to explore three options beyond the subscription model's one-size-fits-all mold.

1. Sell it once:

What's the lifespan of our average customer before they choose not to renew or sever ties? If it's four years, ditch the multi-year contract for an all-upfront deal that brings in four times the revenue.

Instead of selling $30,000 in annual recurring revenue, ask a prospect to pay $120,000 upfront but never again–even if they keep the relationship going into year five and beyond.

The crew from 37signals (software makers behind Basecamp) aptly announced their intentions to sell three products in 2024 under the ONCE moniker:

  • Pay one time, own it forever
  • Get to see the code
  • One fixed price

If "pay once" is too daring, consider a "buy-to-own" option alongside subscriptions to cater to customers who prioritize upfront costs and long-term ownership.

2. Sell more services:

Subscriptions aren't the only path to recurring revenue. Consider offering additional services on top of our core product, like training, premium support, implementation services, data analytics, or customization options.

This allows customers to choose the level of engagement that suits their needs and budget without feeling locked into a rigid subscription box. And often, these custom services make for a better customer experience.

Selling services (in many cases) also gets us out from under the distrustful eye of IT, procurement, legal, and finance teams scrutinizing budget spent on adding new and unproven software tools. The business case and return on investment for services can be much more straightforward for buyers and decision-makers.

3. Give customers a choice:

One size shouldn't fit all, especially regarding a financial commitment. If we stick with subscriptions, make them flexible with tiers or options for customers to find the perfect fit. Think a la carte offerings or solutions that are blended subscriptions and services. The power of choice breeds loyalty and value perception.

These are just a few ideas to break free from the subscription bubble. And we'll differentiate in the marketplace at the same time.

The key is understanding that customer needs are diverse, and offering a variety of options can unlock new doors. Remember, value lies in flexibility, control, and a genuine exchange of benefits.

Don't bury the subscription model completely; evolve it.

Create a buyer's journey where customers feel empowered to choose the engagement that best suits them, whether it's a one-time purchase, a tailored service package, or a flexible subscription.

By embracing diverse revenue streams and prioritizing customer choice, businesses can build stronger relationships, unlock new markets, and thrive in the ever-changing economic landscape.

Let's create a vibrant product and service ecosystem where value and choice, not recurring fees, drive the customer journey. The future is open, and it's ours to design.

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