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January 21, 2017 | Authored by: Kevin Cancilla

Subscription billing is the new normal

It's safe to say that subscription billing is normal, even preferred, in the minds of many consumers. Subscription solutions allow for a convenient, seamless billing experience that lets customers access the products they want without hassle. Plus, as many companies have shown, it's easy to add subscriptions to nearly any product or service regardless of industry.

Subscriptions exist for every market

When one thinks of online subscription management, three industries immediately spring to mind: over-the-top content, telecommunications and publishing. This is understandable - companies like Netflix, Verizon and The New York Times have dominated the world of online subscriptions. They're still clear leaders, but these days, innovative businesses have adapted subscriptions for any industry imaginable.

Consider Allrecipes, a website for cooking enthusiasts. While many of its features are free, Allrecipes uses subscription billing to provide features that enhance the customer experience. Subscribers can take advantage of the menu planner as well as a drag-and-drop feature that helps them prepare their meals for the week, among other benefits.

While some companies have followed Allrecipes' path and added subscription offers, others have used this type of billing to transform their revenue methods entirely. For example, Adobe successfully switched from selling licensed software to monthly subscriptions in 2013. The company experienced a bit of backlash when it first announced the transition, but customers have since seen the benefits and gotten on board. According to Bloomberg, it would take four years of monthly subscription fees for customers to pay the $2,500 Adobe used to charge for one-time purchases. Smaller monthly payments are much easier for individuals and modest design firms to afford, allowing Adobe to expand its user base.

"U.S. visitors to subscription box websites increased 2,963 percent between 2013 and 2016."

This concept extends beyond the digital realm into the world of tangible goods and services. The market for subscription boxes has exploded over the past few years. According to a report from Hitwise, a marketing intelligence company, the amount of U.S. visitors browsing a subscription box website increased 2,963 percent between 2013 and 2016. In addition, 8.6 million people visited such websites during the 2015 holiday season. This is currently less than 5 percent of the online population, but it's clear interest in subscription services is quickly rising.

Adapting subscriptions to your business

While not every company can add subscription boxes to their offers, there are lessons they can take away that can enhance their products. According to DigiDay, one reason customers enjoy subscription boxes is because of the element of surprise. Subscribers don't know what they're getting each month, and they're delighted when it's something they enjoy. Businesses can adapt this idea for their own customers, using data from past purchases and interactions to deliver other products the customer will like but wouldn't have discovered without a guiding hand.

Alternatively, businesses can go Adobe's route and end one-time payments altogether in favor of subscriptions. Those that choose this option can expect a bit of backlash - as Bloomberg noted, some Adobe fans petitioned the White House when the graphics company announced this switch - but as subscription management is the new normal, businesses will quickly see stable revenue and satisfied customers.

About Author

Kevin Cancilla

Kevin Cancilla

Kevin was a Head of Global Marketing at Vindicia. Kevin is an industry veteran with extensive experience in strategic marketing for enterprise software companies and SaaS-based businesses. His 15-plus-year track record includes developing integrated multi-channel marketing programs and partnerships that yield financial results, expand the customer base, increase market share, and build brand affinity. Prior to joining Vindicia, Kevin held senior marketing positions at STEALTHbits Technologies, Tripwire, Epicor, Baan, and Adobe Systems. He holds a BSBM degree in marketing and business management from the University of Phoenix.