Subscriptions, when reasonably priced, are comfortable and familiar to consumers. While they used to apply to print media, today subscriptions apply to countless other types of business. Media subscriptions, like Netflix, are hugely popular, and e-commerce businesses of all sizes are offering subscriptions in the form of supply replenishment (great for busy new parents who don’t want to shop for baby supplies), goodie boxes (a big hit with cosmetic e-retailers), and even educational materials.

Subscriptions make lives easier and a little more fun too.

The fact is, people like it when things are delivered, and they really like knowing that things they use up regularly will be replenished with minimal effort on their part. Businesses love how subscriptions help smooth out lumpy cash flow and add more predictability to their operations. Here are 5 of the many ways online subscriptions can benefit your business.

1. They’re a Recurring Revenue Stream with Positive Cash Flow

One of the most beneficial things about subscription services is that they represent steady, positive cash flow, because subscribers pay for their subscriptions up front. This can help offset the lag between invoicing and payment for typical e-commerce transactions, making it easier to keep inventories up, pay employees, and have money to invest in infrastructure or other improvements. Subscriptions can easily be marketed within your overall marketing strategy, and new web design software and tools make it easier to offer tiered subscription services too.

2. Easier Financial Forecasting

When you have a reasonable number of long-term subscriptions on the books, it’s easier to make financial forecasts than if you didn’t have them. If subscriptions are part of your business model, you can have a much more accurate idea of what next month’s revenues will be. Knowing that your business has a strong base of subscribers makes it easier to try new things, like new ad campaigns or product mixes, knowing that you have a reliable backstop of steady cash coming in should new projects fail to pan out.

3. Building a Subscriber Community Can Increase Referrals

If you do more than simply send out the products or services people subscribe to, you can build a strong, cohesive subscriber community. This answers many people’s need for a community surrounding the things they like, and it can be a great way to bring in organic referrals. When your homepage contains snippets of information about what’s going on in the subscriber community, visitors’ curiosity is piqued. Many will want to know what they’re missing out on by not subscribing.

4. Subscriptions Can Increase Customer Loyalty

If you offer subscriptions that make people’s lives easier, you can develop tremendous loyalty. Those monthly coffee or diaper deliveries give people one less thing to have to think about in day-to-day life, and taking those small burdens off their shoulders can generate enormous good will from customers. Subscriptions accompanied by exceptionally good customer service can be a terrific differentiator between you and your competition, so make sure your subscription offerings include both.

Customers can be extremely loyal when you offer outstanding convenience.

5. A Steady Recurring Revenue Stream Improves Business Valuation

If you have even the slightest interest in possibly selling your business somewhere down the road, a solid subscription base can increase your company valuation. Or if you are pushing for large scale growth in hopes of someday holding an initial public offering, again, subscriptions can make your business more valuable. The fact that subscriptions represent smoother cash flow, and the fact that they indicate strong customer loyalty speak well of your business model and how well you serve customers.

Adapt the Subscription Model to Almost Any Business

Subscriptions can be adapted to just about any type of business, from household goods to entertainment to business supplies. There’s probably a subscription option that fits your business too, though it may take some creativity and brainstorming to hit upon it. Give it consideration, because there are numerous benefits to having a successful subscription service as part of your e-commerce business.

Maxburst is a Long Island-based web design company with full web development services as well. We consider the specific needs of each client, starting from the idea phase through site deployment and beyond. Maxburst understands what’s involved in web design for supporting subscription models, and we know exactly how to make them work for your unique business brand, bringing you the steady cash flow and predictability that a great subscription model can offer.

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