A brief guide to underwriting and membership business models – Health Guild News


Over the past decade, the way companies sell their products has undergone a profound change. Not only have companies started to focus on e-commerce more than ever, but they are also actively adopting new business models, with subscriptions and members being the main ones.

By using these models, companies are more efficient in maintaining a constant commitment to customers. Basically, both subscription and membership models have a lot in common, as they generate recurring revenue while customers use the services for a certain period of time.

Many companies have adopted subscription and membership templates, and if you’re thinking of trying one, this guide is for you. Keep reading to find out everything you might want to know about subscription models and members to make an informed decision on which to choose for the growth of your business.

The subscription business model has been explained

A e-commerce subscription model is a business model where a company offers services on a regular basis in exchange for regular customer payments. It allows companies to leverage customer relationships in order to ensure a steady revenue stream, as subscribers charge monthly, quarterly or annually for a product or service.

Without a doubt, subscriptions are an advantage for everyone: customers enjoy the convenience of getting a product or service that must be delivered directly to your door, while companies have the opportunity to improve the customer retention and predict revenue.

The subscription model is commonly used in the following business areas:

  • Publication
  • Streaming content
  • Food delivery
  • SaaS
  • PaaS
  • E-commerce
  • Subscription boxes

A membership model has been explained

A membership is a business model where members pay a recurring fee to access the value an organization creates. A membership business is in many ways similar to the subscription model. While the subscription model allows customers to get products and services on a regular basis, a subscription gives them access to discounts on products or services. Membership allows companies to achieve a higher level of customer engagement by granting exclusive membership privileges, premium positioning, and creating online communities.

Typically, a membership model is used to:

  • E-learning platforms
  • Streaming services
  • The events sector
  • Communities
  • Non-profit organizations
  • E-commerce stores

Advantages of subscription and membership business models

Recurring income

The main advantage of these models is, of course, recurring revenue. With the subscription model, it’s also easier to predict how much revenue your business will receive each month. This is especially useful when allocating a budget for your business strategy. Knowing your future income, you have a careful representation of your company’s resources, which gives you more freedom to invest in growth and innovation.

Simplified business process

Without a doubt, the subscription model speeds up the sale and purchase process, both for the company and for customers. Fair enough, as subscribers don’t need to buy a product or service every month and the company doesn’t need to handle multiple orders. This certainly increases the productivity of companies, saving them a lot of time and effort.

Improved customer retention

Both subscription and membership models help companies retain a larger number of customers on a regular basis. Longer consumer relationships allow companies to better understand their target audience and use this data to produce effective solutions for business growth.

Exciting marketing opportunities

As mentioned above, long-term customer relationships facilitate the development of successful marketing strategies based on customer preferences and usage behaviors. In addition, the testimonials your subscribers leave on the website add value to the business image.

Business consistency

A subscription makes it easy to anticipate demand and supply, creating a solid foundation for maintaining the consistency of business processes. In addition, this model allows for more efficient planning. For example, sellers of products or other services can be hired in advance, saving time, effort, and costs.

Which model is better?

The most obvious advantage of the subscription model is that it allows you to efficiently plan your financial transactions and calculate your income more accurately. On the other hand, belonging is more of a constant involvement of the client, as it helps to create the feeling of being part of a community. The added value that the membership model offers is one of the best ways to encourage your audience to spend money on merchandise and exclusive content.

You may want to take advantage of both models, as their combination can provide huge benefits to your business. To get started, by combining membership and subscription, you can easily attract your target audience. In order to grow leads in specific niches, it’s a good idea to start with free members and eventually introduce subscriptions. Second, you can offer special offers through members, creating an opportunity to secure higher revenue. In addition, a subscription along with affiliation aims to improve customer loyalty. Just look at how it works: You can set a spending threshold by which a subscriber enters a VIP subscription that allows access to some features for free.

The good news is that both models work online, however, the membership model is intended to be used for non-physical services, for example, digital courses, access to files stored in the cloud, or the cost of maintaining a service. in fact, anything. which does not require shipping. Regardless of the model you choose (or decide to combine), you need a platform optimized for your unique business needs, such as Subtly.

The bottom line

All in all, the subscription and membership business models have definitely come to stay. They provide companies with recurring revenue, help establish deeper relationships with customers, and receive incredibly valuable data for later business development.

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