Learn how to build and set up a service subscription model for your business
Services subscription models are taking the world of business by the storm.
No matter the industry, it’s easy to find a service subscription. For instance, cleaning services, live streaming, food kit services, automobile maintenance and repair services, etc.
If you’re a business that wants to pivot and scale, adding a services subscription model to your arsenal is one of the best things you can offer to your customers.
In this blog, we take a comprehensive look at services subscription models — learn about the industry, benefits of having service subscriptions, and best practices.
Service industry growth: an overview
Starting from newspaper subscriptions to SaaS and even automobile, service subscriptions are now common in every industry. The service subscription model offers convenience, cost benefits, flexibility, and value to both customers and businesses.
Here are some statistics from the subscription industry for 2024
What is a subscription model for services business
A subscription model is a way for brands to sell services on a recurring basis. Customers pay a fee, for example, weekly, monthly, bi-monthly, etc. for the services provided by a brand. Subscription models are used for products and services. Some examples of service subscriptions are online streaming subscription, house cleaning services subscription, automobile servicing subscription, etc.
What are the benefits of service subscriptions for businesses and customers
An increasing number of businesses are adopting the subscription model into their businesses. That’s because this model offers many benefits to businesses. Here are some ways in which the subscription model provides advantages to both businesses and customers.
Convenience
With service subscriptions, services required on a regular and recurring basis do not have to be bought every month. Customers pay once and as a business, you keep providing the services. This makes a lot of the tasks easy for you, bringing convenience. For example, billing, payments, service delivery, etc., can run on auto mode bringing convenience.
Curation
Many service subscriptions offer curated selection of services. For example, if it’s a home cleaning service subscription business, it can have various options under one umbrella – kitchen cleaning, fan cleaning, garden cleaning, etc. Curation in service subscriptions can help businesses increase the average order value and increase profits.
Community
Businesses offering services via subscriptions can create engagement opportunities for customers and create a community atmosphere for them. For example, automobile services companies often create meet and greet events for customers who own the same car. This helps businesses ensure customer loyalty and customers get to feel like they belong to a community.
Cost benefit
Customers also get some cost benefits in service subscriptions. Because businesses can make more recurring revenue, it’s easier to offer some discounts and deals. For businesses, another benefit is the predictability factor. Businesses can predict incoming revenue and plan accordingly.
Engagement
Subscriptions provide opportunities for ongoing engagement with customers. For example, regular updates and notifications, new offers, any new brand announcements, etc. Moreover, special events also help engage subscribers.
Scale
One of the major benefits of service subscriptions is the ability for your business to scale. Subscriptions have the elements of long-term revenue, customer loyalty attached to them and hence, are excellent drivers of scale. Businesses that are at a pivot stage can truly benefit from subscriptions.
Examples of subscription model in services business
Here are some common examples of subscription business model in different services:
1. Netflix – streaming service
The market for online streaming services is projected to reach $330 billion by 2030. And one of the best examples of online streaming services is Netflix. Customers get to choose from multiple plans that allow different usage. For example, some plans allow single users and others, multiple.
2. Purple Carrot – curated meal kit service
Food service subscriptions are one of the fastest growing industries. For example, Purple Carrot is a vegan food service subscription that offers meal kits or prepared meals. The subscription plans are offered on a weekly basis.
3. Sparq – automotive services subscription
The brand Sparq offers an annual subscription for automobile repairs and maintenance. The subscription includes free diagnostics, free annual inspection, and more.
How to set up a service subscription – step by step
To enjoy all the benefits of the subscription model, you will have to set up a robust services subscription model. How good your subscription foundation is will decide the fate of your business model. Follow these steps to get started with your subscription-based business strategies.
1. Identify your subscription type
There are many different types of subscription models. Even for services, you have options to choose from. For example, you could offer fixed services plans, curated services plans where customers can choose the services they want, or subscription types where you provide a variety of services based on different tiers of plans.
2. Determine your subscription pricing
Pricing is one of the first factors that has a huge influence on customers’ decision to sign up for your service subscription. Customers that prefer subscriptions fall into a few segments. For instance, those that want to pay less, those that prefer paying on a monthly basis, and customers who have the flexibility to change and adapt their subscription usage to their needs.
Consider a few factors such as market research, competitor pricing analysis, conduct customer surveys to figure out the pricing for your service subscription.
3. Get clarity about how your service subscription works
Your subscription structure and features would depend on the nature of your service and industry. For example, whether it’s an online service, or a service that delivers physical products, etc. Figure out exactly how, when, the technology required, resources, materials, etc. Figure out your subscription-based business strategy in detail.
4. Create a service subscription landing page
One of the initial steps when launching your service subscription is the landing page. This is the page that you can use for marketing purposes to attract traffic, generate awareness, and create a buzz. The landing page should have all the information your customers should know. It should show the customers the value your services can bring to them.
5. Determine the subscription plan duration
Subscription plans can be offered for various durations based on customers needs and preference. For instance, SaaS product subscriptions such as Grammarly are available on a monthly, quarterly or annual payment basis. Customers can choose the plan they prefer.
6. Identify the value proposition of your service subscription model
How do you create a value proposition? You must consider various factors, such as the monetary benefits to customers, community experience, other perks, how involved your customers are made to feel, etc. Once you figure out the key points, promote them and make them known to customers. Keep adding elements that add more value.
Here’s an example of Spotify that added Hulu subscription to its offer, adding more value to customers.
7. Ensure top functionalities
When you set up a subscription service model, you must try to provide the best possible functionalities to customers. Here’s a list of some functionalities in your subscription website or app:
- Ease of use
- Technology capabilities
- Automation
- Ability for customers to manage their accounts
- Save payment methods
- Cancel or pause subscription
- Easy customer support
- Easy billing and payment
8. Choose the best subscription platform and tools
Your subscription apps and tools are the backbone of your service. They’ll determine how easy it is for customers to use your services, whether they feel engaged enough, and the smooth functioning of your services. There are many Shopify subscription apps available in the market. Choose an app that is intuitive, comprehensive, and customizable based on your needs.
Why use Appstle to set up your subscription service model?
Appstle is considered the number one subscriptions app in the market. Shopify merchants across industries use the app. Many subscription businesses have migrated from other apps to Appstle and found success. Here are some of the capabilities of the app that make it worth a try:
1. Excellent customer support for seamless business flow
Appstle provides 24/7/365 customer support. Merchants receive hand holding while installing, technical support as well as generic support as and when required. This ensures your business and workflow do not get disrupted.
2. Easy dashboard for complete control
Appstle has an easy-to-use admin dashboard with automation features. This ensures you have complete control over your customers’ subscription experience. You can get an overview of your customers subscriptions via the dashboard and optimize if required.
3. Subscription widgets to enhance experience
Appstle provides a wide range of widgets to add additional features that can help you enhance customer experience. For example, you can use these features for upselling, bundling, etc., continuously adapt and improve your subscription service model.
4. Analytics and metrics for optimization
Appstle subscription app has in-house analytics and metrics features to help you always be on top of the game. With these metrics, you can get an overview of new orders, upcoming renewals, churn rate, customer behavior patterns, etc.
5. Customization for unique subscription models
Appstle’s expert technical team helps Shopify merchants customize the app so that they can create unique subscription businesses. For instance, if you require a feature that is not in-built in the app, Appstle’s team goes the extra mile to build the feature and incorporate it in your setup.
Get started with you services subscription model
We’ve made it easy for you to get started with your services subscription business. If you are a Shopify merchant, Appstle Subscriptions App is the best tool you must add to your business. It is an excellent tool for recurring revenue models.
Appstle helps automate the various tasks and functions that make managing your subscription business a breeze. For instance, recurring payment, dunning management, tracking subscription renewals, managing customer accounts, customizing features, etc.
Most importantly, Appstle Subscriptions app easily integrates with your Shopify and Shopify Plus systems.
