Skip to main content

How to Continue Riding the Wave of the Subscription Model

  • Stephanie Erbesfield - Content Marketer
  • Oct 18, 2021
  • Chargebee

Chargebee is a recurring billing and subscription management tool that helps SaaS and SaaS-like businesses streamline revenue operations. Chargebee integrates with the leading payment gateways like Stripe, Braintree, PayPal etc. around the world to let you automate recurring payment collection along with invoicing, taxes, accounting, email notifications, SaaS metrics and customer management.

Chargebee handles all your crucial workflows from lead to ledger with power-packed integrations that include Salesforce, Xero, Quickbooks, Avalara, Slack, among others. To learn more about Chargebee, check out our website:

We’ve indeed entered the age of e-commerce. For some time in 2020, it seemed that the world had shifted entirely online, with more consumers shopping from the comfort of their homes than ever before.

While the return to shopping in stores is making a comeback, the online-shopping trend is here to stay. In fact, according to McKinsey’s U.S. consumer-sentiment survey, there has been a 40% net increase in consumers’ intent to spend online even after the Covid-19 crisis is entirely behind them. 

Whether it’s for food, beauty products, or clothing, we’ve seen a substantial pandemic-driven shift in how and where consumers are making their purchases, whether it be Amazon’s Subscribe and Save program, subscription boxes, or meal kits.

Consumers spent more than $791 billion online in 2020, according to the U.S. Department of Commerce data — per an analysis from Digital Commerce 360 — a 32.4% growth in e-commerce spending year over year.

Read on to learn how the subscription model allows you to continuously meet and exceed rapidly evolving consumers’ expectations.

The Subscription Model

Consumers’ buying habits are moving toward a more personalized, hassle-free shopping experience with expectations of convenience and exceptional service. The subscription model allows businesses to meet all of those needs and much more.

Subscriptions offer a unique opportunity: they allow consumers to have their favorite items arrive at their doorstep on a recurring basis and simultaneously enable your business to collect recurring revenue easily. Additionally, they give merchants a chance to diversify their product offerings, enhance the customer experience, and extend their lifetime value (LTV). Subscriptions can also give your business a substantial competitive advantage by adding a predictability level, helping you anticipate supply and demand more accurately.

There are financial and competitive advantages if you’re interested in bringing subscriptions to the forefront of your business model. UnivDatos Market Insights estimates that the global subscription e-commerce market will reach close to $480 billion by 2025. You can continue to tap further into this rapidly growing market and scale your business as more global opportunities arise. Still, to do so, you must have the right resources.

With the proper tech stack in place, you can confidently offer new products, enter new regions, and ensure that your customers have a seamless experience regardless of their locations. 

Focus on Automation

When it comes to scaling your subscription business, automation plays a huge part in all aspects of the customer journey. With the right tech stack at the core, you can easily make changes to accommodate different segments of customers, whether this is through new product or packaging options, attractive pricing options, or setting up unique coupon codes.

With all these considerations in mind, it is crucial to have a core subscription management platform that helps your business expand into new products, categories, and geographies with a single click of a button. 

Having a subscription management system that integrates with your existing tech stack provides all the information you need to scale your business flows in and out of one place without significant back-end worries, such as taxes or integration hiccups that could affect reporting or billing.

In-house systems are rarely built to scale. Subscription management and recurring billing systems often require many developer hours to make changes, such as expanding your business into a new region or even just adding a new product. You can focus your energy and resources on scaling your business rather than on time-consuming back-end work by adding automated workflows. 

Experiment with Pricing and Packaging

E-commerce players need to be agile to thrive in a market that is not only highly competitive but — due to fast-changing customer preferences — also highly dynamic. Subscription businesses in particular need to have the ability to enhance their value proposition by making proactive changes to their pricing and packaging. 

Customers are no longer accepting rigid, inflexible pricing options. Many of these price changes are time-sensitive and homegrown systems often struggle with rapid experimentation, especially when these changes need to be made at scale. That is where automated subscription management and billing can come to your rescue. 

Subscription management and billing systems like Chargebee integrate with your tech stack and enable you to carry out pricing experimentations and iterate quickly. You can offer your customers various pricing and package options, including subscribe and save, different types of boxes, and monthly, quarterly, or yearly subscriptions.

Testing, iterating, and optimizing your pricing can help you find the right price point to help you retain and maximize your revenue from each customer segment.

Offer Customers a Personalized Seamless Experience

As shopping habits change, customers expect to be greeted by a personalized, friendly environment from start to finish. From regionalizing based on language to offering several different payment options, ensuring customers can always experience your website and checkout process without worrying is paramount. 

Abandoned carts are one example of how an inconvenient checkout process can negatively impact your business. According to the Baymard Institute, 18% of online shoppers abandoned their cart because the checkout process was too long or complex. Creating safer checkouts with secure payment gateways and fewer fields will help customers quickly move through the checkout process. Stay focused on building the best end-to-end consumer experience by automating checkout and subscription management.

Lastly, no one wants to feel locked into a subscription. Giving your customers the option to pause, skip, and change how often they receive their subscription is imperative to keeping them pleased. Having this level of transparency and flexibility will build brand loyalty and likely lead to an increase in customer lifetime value as one-time customers turn into repeat customers. 

It would also help if you offered multiple payment options whether it’s a credit card, direct debits, options like Klarna or AfterPay (buy-now, pay-later options), or PayPal — customers like the convenience of choice. Combined with less complicated checkouts, the ability to alter their subscriptions and choose from multiple payment options will help your customers make better decisions and reduce cart abandonment. 

Leveraging subscriptions by automating workflows, payments, and checkouts will set up your company to grow and remain competitive while simultaneously empowering you to stay future-focused and continuously thinking of new ways of delighting your customers.

Looking for more ways to grow your brand? Discover the latest trends on how subscription businesses can expand by attending SubSummit!