When people think of subscription businesses, they often think about subscription boxes that bring a new wardrobe or food item to their doorstep every month. They might also think about services like Netflix, which they pay for month after month to enjoy watching their favorite movies and TV shows.
Recently, there has been a surge in businesses formerly outside the scope of traditional subscription businesses recognizing the benefits of a subscription model.
For companies, a subscription service model can lead to a decrease in customer churn and higher customer retention, since customers sign up for autopay and their subscription automatically renews every month or year.
For customers, subscription services offer convenience because they don’t have to continuously look for or buy the things they need on a recurring basis. Also, they know exactly what price they will be paying when they sign up for a subscription and are never surprised by unexpected fees or higher costs.
Here are three surprising industries that are making the transition to a subscription business model with successful results.
1. In-home boutique fitness
Photo may be a household name today, but it wasn’t when it first launched in 2012. Back then, the idea of bringing what the company calls “boutique fitness” into the home was groundbreaking. People had home gyms, but they didn’t have a way to capture the experience of a fitness class without driving to their local gym. By 2020, Peloton has millions of members streaming live classes around the world.
Members pay for a yearly subscription, as they might for a gym membership. Because they have already invested in the Peloton bike itself, they are highly likely to stick with their membership, even if they don’t use it every day.
In many parts of the world, the thought of owning a car is quickly becoming old-fashioned, thanks to companies like Zipcar. With Zipcar, people can instantly rent a car for a few hours, a day, or longer. This is especially beneficial for people who live in urban areas where the cost of storing a car is often exorbitant. It is also becoming popular at some universities, especially those that do not allow all students to keep their vehicles on campus.
Zipcar requires a membership that starts at just $7 a month. Members can log in to their accounts at any time to choose the type of car they want to rent and the length of their rental.
3. AC services
Having reliable air conditioning is essential in hot areas. Regular service and maintenance can keep the AC running all year long and prevent homeowners from having to go without it in the heat of the summer. The Indian company 999services.com recognized the need for homeowners in India to have access to affordable, reliable AC services that they could order on a recurring basis.
999services.com runs on a subscription model with options ranging from one-time service to 24-month servicing. Homeowners can schedule online and have the same reliable technician service their AC at every appointment. This provides an added level of security and ensures that only highly trained and dedicated technicians enter a 999services.com customer’s home.
Our Subscription Services the Future of Industry?
The fact that so many companies are turning to a subscription business model suggests that it is here to stay. Consumers have grown comfortable with paying for goods and services on a monthly or annual basis. They recognize the convenience and cost-savings that subscription models offer, and they have grown familiar with the technology needed to set up an account.
It seems reasonable to assume that we haven’t seen the last of subscription services. The only question is, which industries will be next to get in the subscription game?