Subscription businessWhile the family argues persistently about having hard or soft tacos, in the final scene of the advert for “El Paso! Tacos” the little girl shrugs her shoulders and says … “Why don’t we have both?”

(See the video below)

The point is: not all choices are mutually exclusive; not everything is a zero-sum game. That’s a fact that we here at Saxum find ourselves pointing out to the many businesses that find themselves embarking for the first time on some recurring revenue offering. “How do we manage and price our service or product? Should I offer an all-you-can-eat, or would a first-one-free model serve me better?”

Put differently, it would appear that the choice between a subscription model and a consumption model is mutually exclusive. And the reality is that one certainly can choose a single option but we would always suggest you offer both and give your customer choices (not too many though as that can be counter productive).

Why? The first reason is that the subscription and the usage/consumption models can and do “feed” off of one another. Any subscription will be consuming something, so it would be a natural option to have both fixed and consumption plans.

By example, what if my marketing team informs me that they will get more traction if they can offer a lower monthly commitment plan with overage costs to complement my existing single-fee-focused product catalog?

The second reason is that uptake is always greater when the customer is offered choices and where they feel that they have control over the way they engage and the costs they are likely to incur.

I am sure I would not be alone in suggesting that the mobile phone plans always leave you not really knowing what you are getting and this leads to 53% of all customer dissatisfaction. So while offering choice, be sure to keep your plans clear and easy to understand so that the customer knows what they are getting and to prevent customer churn.

Saxum Commerce prides itself on both understanding the subscription economy and also on providing a powerful and flexible platform to take advantage of it.