B2BDecember 22, 2022

The Transition of the B2B Revenue Model with the Growth of the Subscription Economy

The subscription economy has undergone a seismic shift in the last couple of years and businesses are gearing up for the upcoming changes.  Not just the end customers but several businesses are also subscribing to services, instead of buying products. To keep up to the trend, businesses are changing their growth strategies, focusing primarily on empowering customers to retain them and increase sales.

With more B2B subscription-based business models popping up in the software and media space, businesses are undergoing financial and logistical changes to enhance customer retention. The B2B wagon is rapidly joining the subscription game, even in traditional industries. Further, the emergence of the SaaS ecosystem is boosting the conversion of B2B organizations to subscription models. This recurring revenue model calls for modification of the traditional customer acquisition strategies.

Why are B2B organizations opting for subscription-based models?

Subscription-based businesses allow convenient and cheaper access to products and services. Considering the speed at which technology is driving innovation, businesses are always under pressure, if working with a typical ownership model. Investing in expensive technologies can be risky as it might not be of much help after a few months or even days. On the other hand, subscription service allows business to upgrade or change services at their own convenience.

Moreover, since subscription-based business is all about complying your services with the needs of customers, businesses can hardly go wrong. Its hyper customization helps provide customers with exceptional experiences and adapt to the changing demands. It also provides upselling and cross-selling opportunities with its automatic upgradation of product versions and feature.

The subscription based B2B revenue model needs to work on improving services and integrating the latest technology for sustainable business growth. The subscription model makes it easier to build product features into different categories. This makes global markets easier to reach and increases return on customer acquisition costs. The constant contact of subscription revenue model enables easier cross selling of services as it helps build a relationship with your customer and drive customer loyalty as users depend on the value they provide.

One-time payment may bring more money at once, but overlooks the longevity. Whereas, the recurring revenue system adds up to more customer-spending over time. The data-backing ability of the subscription commerce model is triggering more brands to innovate different types of revenue models in B2B. Brands are getting creative with their logistics, infrastructure, and automation of the subscription system.

Are you also considering converting your B2B revenue model to a recurring one, but not sure how to upgrade your tech stack? Well, worry not, as we can make it seamless for you, with our solution. SURE, our subscription billing platform is completely customizable and can be easily integrated into your existing business structure to empower your business.

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