General Business News for December 2018
How to Maximize Subscription Marketing Efforts
According to research from McKinsey & Company, 15 percent of Internet consumers have become members of at least one subscription service in 2018. The consulting firm also found that these subscription-based models cover a multitude of products, including food, drinks, meal kits, clothing, vitamins and razors. While these are well-known by consumers, there are many other types of subscriptions – such cloud computing or storage technology services – available for purchase by both consumer and business customers.
According to McKinsey & Company, the online subscription industry has increased in size from $57 million in 2011 to $2.6 billion in 2016. With this rapid growth, it's best to know how to maximize one's approach in this increasingly crowded and competitive industry.
Give a Little, Get More Back
One way to run a subscription-based service is to let customers get a trial or have access to only limited functionality of the product or service. From there, businesses can offer additional options to upgrade to – demonstrating the product’s value while helping monetize additional functions. Whether it's a cloud-based storage or computing service, one that provides web hosting or on-demand applications, those with access to limited options or select software titles of a software suite might discover a need for additional computational hours or storage. If they can learn more about the full suite of available software titles, they can see the potential to accommodate new clients or expand their service offerings.
In other scenarios, it's not necessary for businesses to monetize their entire user base. On job networking websites, for example, individuals can register for free, uploading their resume to the network to list publicly. This can also help self-employed individuals look for new clients through cold prospecting or from companies posting advertisements for contract help.
In exchange for workers having a free opportunity to post their resumes, recruiters or HR managers will be more likely to sign up for paid accounts because there’s a continuous pool of talent with a diverse skill set. Along with being mutually beneficial for business owners and individuals, job networking websites themselves can benefit through a subscription model by monetizing advertising traffic through means such as ad revenue.
Another way to maximize subscription-based marketing tactics is for businesses that specialize in surveys to incentivize their existing customers with referrals. If a self-employed person doesn't have the budget for a premium plan that features surveys with dozens of questions and highly technical analytics for each customer survey, the company running the online survey won't be able to count it as a revenue generator.
However, if the customer who is taking the survey is a small business owner with more advanced needs or is employed as a customer service manager, the individual might end up subscribing to the paid tiers during a company meeting at the same online survey company. So, while the initial customer with the online survey company might not be generating revenue, this action can act as an indirect marketing funnel to convert new customers into paying customers.