The Subscription Revenue Model VS Pay As You Go
The recent continued changes is the consumer buying and spending habits have forced businesses to change their revenue models to accommodate the new trends in the market. The customers are demanding for simple, hassle-free and manageable shopping experiences. Companies are turning into the subscription and the pay as you go revenue models to cater for this need.
The Subscription Revenue Model VS Pay As You Go
In the subscription revenue model, a customer pays a subscription fee mainly on monthly basis, to have continued access to a product or service. On the other hand, the pay as you go revenue model involves metered use of a product where the customer is charged for what he/she uses on a transaction basis or when he/she uses the service. Examples include “Pay-per-view TV,” custom research firms, online journal publications among others.
The subscription revenue model
The subscription model owes its immense success to the value it provides to both the customer and the business owner. The most value for the customer comes from convenience; first, with the simplicity of that comes with use of subscriptions. The customer no longer needs to worry about the purchase process, or have to remember to make an order each month, because subscriptions gives them the assurance that they will have what they need beforehand.
Moreover, the customer no longer needs to go through the hassle of making a trip to the website or store to place an order. Secondly, subscriptions help customers to stay within their budget by offering a flat rate with minimal price fluctuations. There is also added value to the customer due to huge discounts, or economies of scale by getting it all for the price of one through bundling.
The major benefit of the subscription model to the businesses is the ability to make accurate revenue projections through the expected recurrent sales. Subscriptions encourage recurrent payments, which imply that businesses using this model have more guaranteed revenue thus giving them up to …