Types of Subscription Models to Improve Profitability and Attract Clients

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By now it’s no secret that using a subscription model can help you establish and maintain loyal customers. We often hear the success stories of brands who have captivated their customer bases by offering valuable subscriptions on a recurring basis.

But how can we recreate the success of these brands? What is the formula for a successful subscription model?

While there are several different types of subscription models, we are going to explore two main ones: the information and content model and the products or services model. Each type has the potential to attract loyal clients. Making them stay loyal requires hard work, personalization, and changing with the times. 

Model 1: Information and Content

In this model, clients search for information and content to understand, learn, or keep up with their interests. They might be interested in the arts, cinema, shows, or music. They are interested in digital and physical media. They may or may not get a physical product and may get access to the creator or information center. There may also be tiers to the accessibility of the creator, the information, or the ultimate product. Typically, there is a monthly cost, but sometimes there can be a weekly or yearly cost. Then there are distinct software and platforms for digital or physical parts. Let’s look at two examples of this type of model. 

Example A: Patreon: The Platform and Stage for Loyal Clients

Patreon is THE place for Indie artists, content creators, movie makers, local businesses, and writers. Patreon states they are a subscription-style payment model. In 2013, they were founded by a YouTube musician and his college programmer roommate. Over two hundred thousand creators now call Patreon home, and they are supported by more than six million patrons to their arts. 

Everything pertaining to the artist’s work is done on Patreon’s insider community where they monetize their audience. This means that they gather a following first, and then move onto Patreon to earn money. Subscribers view an artist’s work directly on Patreon, and, if they decide to sponsor them, they make payments through Patreon. Loyal followers can set up recurring monthly payments. 

If an artist has followers and loyalty to their brand, then this subscription format works. Each artist continually creates new content to retain their customers and clients. This platform is very personal and will gratify clients’ loyalty through consistent, niche content. 

Example B: Magazines, Newspapers, and Medium: Physical and Digital Information Hubs

Everyone knows about the children coming by our homes in years past to beg us to get a magazine subscription to raise money for their school. Or from the way past, the bicycle riding kids delivering your newspaper in a plastic bag, somewhere in the front bushes. While those subscriptions are still around, they have dramatically declined in popularity. The physical media model has lost subscribers, and newspapers and magazines have consolidated or closed. 

The good news is that digital media subscriptions have increased exponentially. The New York Times has reached 7.5 million digital subscribers in 2021 for an $8 monthly or $2 a week cost. Apple News at $9.99 a month (125 million subscribers with free and paid subscriptions) and Medium at $5.00 a month or $50 a year with 170 million subscribers. Digital media platforms can use apps or a website, and they use similar billing through PayPal or credit cards. With low material and distribution costs, the price of a subscription can be kept low, enticing subscribers where print media has failed to.

Model 2: Products or Services Demand Higher Price Points

When clients subscribe to products or services, they expect more benefits than one-time purchases. They are paying for access to you or your products, and they expect them to be top-notch, exclusive, and for your tireless support. They expect more from you and can hold the membership back if you do not deliver. In return for the higher value, products and services sold as subscriptions may demand a higher price point.

Example A: Products in Crafts and Clothing

This model has emerged from the women’s clothing and crafting industries, starting in 2017. The subscription to crafting supplies such as decorative tape, stickers, stationery, and other creative consumables started flourishing in 2019. The subscriptions of thirty to one hundred dollars or more for paper and craft items seem unbelievable, but there are companies like Simply Gilded for decorative (washi) tape and Wonton in a Million for stickers who have thousands of subscribers.

Women’s clothing, purses, and high-end fashions also use this model. Stitch Fix was one of the first to do a clothing service for women in 2011, and as of November 2020, has over 3.5 million subscribers. With their subscription model, customers are sent clothing to try on, then they choose what they want to buy and return the rest. Amazon even got into the act, with their comfortable clothing service: Pick what you want, we send it to you, you try it on, and send back what you don’t want.

Example B: Services of a Coach or Therapist

The service subscription model has been around ever since someone needed help. Better Help, an example of a subscription model for therapy and counseling, can cost hundreds of dollars a month. The costs are higher for skilled coaches, trainers, and wellness or lifestyle persons. It all depends on what their services are and how they help their clients. Clients who have coaches can be the most loyal, they will go to battle for you. You, in turn, give them everything you can, each week or month. This is the model businesses strive for. 

In conclusion, subscription models, whether they are information, content, products, or services all involve human emotions, hard work, and self-care for both you and your clients. Changing with the times, accepting edits and recommendations, increasing your output, and giving 100% each time will keep your clients loyal and increase your subscriptions and profits. 

Contact us for help towards loyal clients and increased profitability.

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