Why The Subscription Model Is The Future And How To Make The Switch

Robirt Kong
Robirt Kong
April 11th, 2019
Estimated read time: 4 minutes, 0 seconds

We’ve seen explosive growth in the field of subscription and recurring billing with more and more software and SaaS companies discovering how impactful implementing a SaaS subscription model can be for their long-term growth plans.

Maybe you’ve caught wind of all the buzz around recurring billing or perhaps you’ve seen similar companies in your industry already rolling out subscription pricing. Whatever the case may be, you’re probably wondering if implementing a subscription model is the right move for your company.

To help you make an informed decision, we’re exploring the subscriptions trends in today’s market. Keep reading to learn the advantages of using a subscription model and discover just how easy it is to introduce subscriptions to grow your company.  

Subscribing to the idea of a subscription-based business model. 

According to FinancesOnline, the growth of the SaaS public market is expected to hit $76 billion by 2020. It’s clear that subscriptions are poised to disrupt the traditional business model, which explains why more businesses are switching to subscription services instead of one-time sales. Some of the benefits of switching include:

1. Frictionless Product Delivery
In today’s fast-paced society, consumers are constantly on the lookout for the latest and greatest. Whether you’re selling digital products, software, or SaaS, your customer base will want to get their hands on the most up-to-date version of your offerings. Switching from a physical distribution system to a digital fulfillment process helps solve this issue by cutting down on unnecessary wait time. Your product already exists in digital form so there’s no need to wait for an updated physical copy to arrive.

In addition, scaling into international markets can become a more viable strategy for growing your business. Selling software as a physical product can be challenging when you’re forced to figure out how to distribute your product to international customers. But delivering your products in digital form helps sidestep this problem by removing buyer location, customs, and shipping costs from the equation. Regardless of where they made their subscription purchase from, you can rest assured knowing customers across the globe will receive your product in the same amount of time.

FastSpring’s automated email delivery for files, license keys, and software makes the post-checkout fulfillment process a breeze by delivering products straight to your customer’s inbox!

2. Maximized Revenue Potential
A second benefit of introducing a subscription revenue model is that it allows your company to start making more predictable revenue. If your company is operating on a “one-time sales” model, you understand how unpredictable your revenue streams can be. Monthly or quarterly revenue performance can start to look like peaks and valleys based on the volume of one-time purchases made.

But what if there was a better way to do business and grow your company?

Switching to a subscription model gives companies the confidence to scale knowing that they can depend on an active customer base to provide consistent cash flow.

3. Reduced Customer Churn

We can all agree that customers are the most important part of any business. Nurturing your customer base and building long-term, long-lasting relationships with your customers is the key to increasing customer lifetime value. In fact, according to Invesp, it can be five times more expensive to attract a new customer, than to keep an existing one.

Having customers subscribe to your software or services helps to cut down on customer churn. Since most subscriptions are tied to your customer’s credit cards and set to renew automatically, your customers don’t have to worry about making payments on time or worse going through the hassle of repurchasing their favorite product altogether. FastSpring’s built-in dunning management tools also enable companies to notify their customers about past due accounts or failed payment options to further prevent unsubscribes and protect revenue potential.

Implementing a Subscription Billing Model 

Looking for a simple and easy way to start rolling out a subscription plan to your customers? FastSpring’s full-service ecommerce platform has enabled thousands of companies to seamlessly integrate subscription services without sacrificing internal resources and budgets.

FastSpring’s subscription solution gives your company complete control to create subscription products. Easily define how often payments are due, specify payment amount, and define subscription terms—all from one full-service platform.

Additionally, with support for over 20 currencies, 17 payment methods, and 25 languages, FastSpring helps software companies extend their reach globally to attract international buyers and boost conversion rates. Regardless of where your customers are shopping from, FastSpring’s built-in localization features help ensure that your subscription customers can pay for your products or services using their preferred payment methods.


Want to learn more about how implementing a subscription model can help grow your revenue potential and boost customer retention? Click here to speak with one of our platform experts!


Try FastSpring

Get a free account and see why FastSpring is the ecommerce partner of choice for software providers around the world. Try our full-service ecommerce solution today to unlock revenue growth for your online company.