The subscription economy has been booming for the past few years and has become an appealing business model for many companies, either as a sole focus or as an extension of their existing structure. 9 in 10 UK consumers are now subscribers and a study has found that British consumers spend around £2bn a year for subscription services – with no signs that this trend is going to change in the next few years. However, it is a very competitive industry and businesses have to make sure to stand out if they want to stay ahead of competitors.
If your company is looking to get started or find a few ideas to improve your sales strategy, our expert team shares their top 5 tips for selling subscription services more efficiently.
1 – Make subscription the only option
Some businesses offer subscription services as an additional option to “à la carte” services rather than making it the sole focus of their business. However, if your company wishes to develop a subscription model, you may want to consider making subscription the only option.
Having other choices next to subscription services might entice potential customers to steer towards these options – which is not what you’re looking for if you want to focus on subcriptions. By making it the only option and combining with other strategies mentioned in this article, you’ll increase your chance of selling subscription services.
2 – Try the freemium model
A freemium business model is a pricing strategy that involves having two tiers: free and premium. Free users have limited access to a service while premium users are granted full access but have to pay for the service. This is not only a great way to reduce the customer acquisition cost (by effectively lowering the barrier to entry) but it creates a natural lead nurturing process as users can experience the service’s value through actual usage.
In order to successfully implement a freemium model, subscription businesses have to consider the following:
- Usage quotas: you want to impose a limit on your service use, whether that’s storage capacity, monthly credits, data quotas…
- Feature limitations: premium users should be offered extra features and enhanced functionality – at least on an ad hoc basis
- Support restrictions: access to customer service or resources can be limited or prioritised for premium users
There are several ways of implementing a freemium model that will help you increase subscription services sales but, be sure to find the right balance or features and the right pricing point.
3 – Offer a free trial
If a freemium model isn’t quite right for your business, offering a free trial of your service will increase your chances of converting potential customers. The idea of lowering the barrier to entry and highlight service value through actual usage is the same, but you are offering full access to your services for a limited amount of time only.
The trial should be long enough for your audience to experience the value of the service, but not too long so that they would no longer need the service or that it would be costing your business money.
Research from Recurly has found that conversion rate after a free trial for a monthly subscription was on average 59.8% – so this is a valuable strategy to look into.
4 – Offer a gift option
Businesses offering subscription boxes may be able to drive more sales by adding a gift option, meaning that consumers have the choice to purchase the product for themselves, or as a gift for someone else.
This can improve sales as this expands your target audience to not only people interested in your product, but people who know someone interested, even if they are not looking to purchase your product themselves.
Depending on your business, this may also be applicable to services.
5 – Use different channels from your competition
Subscription services are all the rage, so it’s vital for businesses to find ways to stand out from other businesses in a highly competitive industry. Most competitors will be using a website and social channels that are relevant to the target audience. To market your subscription services and get a competitive advantage, direct sales can be surprisingly efficient. With an excellent ROI and the possibility of connecting on a personal level with the audience, your company may be considering using direct marketing to complement other sales channels and stand out in your market.
We hope these five top tips for selling subscription services have given you some insight on some of the main things your business could look into in order to develop a solid sales and marketing strategy around your services or products. Acwyre has extensive experience working with subscription businesses such as Gousto or Hello Fresh. If direct sales for subscription services is something you’d like to explore, feel free to get in touch.