The smart technology that we rely on in our daily life is a blessing of the Internet of Things (IoT). As the technology world gets overruled by the IoT, business models are witnessing a massive transition. Companies selling IoT products and related services are in huge demand and this is the time to make the change.
Consumers are well aware of how fast technology upgrades, preventing them to make long-term commitments. Thus, emerges the need for flexible monetization options in the IoT market. The IoT subscription model allows companies to access new markets by offering convenient subscription plans to people who were previously unable to afford the upfront cost of the product or service. This model also offers business flexibility for creative IoT billing options and enables businesses to leverage aggregated data to provide additional new services.
The monthly or annual subscription plans generate a recurring revenue stream for IoT businesses, enabling them to leverage nonstop connectivity, something much needed for IoT users. Amazon Echo, the most common IoT device, gives access to a library of the users’ favorites in Amazon Prime Music at a small monthly subscription rate.
Benefits of the IoT Subscription Model
Happy Customer, Successful Business
The subscription model of IoT solutions boosts transparency, helping organizations demonstrate the value of their offerings more easily. This increases consumer engagement and market share. Its ability to offer and improve personalized customer services via collected customer data enhances customer satisfaction. And to top it all, customers don’t need to worry about upgrading technology as it is taken care of in the upcoming subscription services.
Security of Recurring Revenue Stream
In this unpredictable economic landscape, a stabilized business cash flow can mitigate risk. The predictable and recurring revenue stream of the IoT subscription model helps maintain the balance sheet. This allows companies to focus on building new accounts instead of constant customer re-selling. Moreover, with the subscription model of IoT, businesses can continually upgrade their services.
Better Scope to Market Campaigns
The best part of any subscription business model is that it can track how, when, where, and why customers use their devices. The regularly-generated device data allows IoT companies to identify opportunities for product development, act on their services as and when needed, and pursue a broader range of prospects. This is the ideal way to market products and services.
Challenges of the IoT Subscription Model
For the IoT subscription model to run smoothly, you need to handle billing accurately, support tax management, provide PCI compliance, and assure security. For sure, you can implement a billing platform to streamline these tasks, but you also need to make sure that the platform easily integrates with the existing business systems. The platform has to understand your current and future business needs, as well as the IoT industry.