Top Subscription Management Trends Everyone Needs to Know in 2021
2020 turned out to be a disastrous year for many industries, and the subscription industry was one. According to economic times, “the subscription Industry lost $15 billion in FY21 due to COVID-19.” Amid the relentless spread of the COVID-19, the subscription-based business models were forced to shut.
A recovery looks impossible as a handful of days are left for 2020, and the pandemic is still raging. The pandemic created various financial and operational challenges for a subscription-based business model. However, few subscription companies did well and were among the best-performing companies even during the pandemic, such as Zoom and Slack.
The subscription industry is gaining momentum slowly at the end of 2020, and we are quite sure 2021 will be one of the best years for the subscription economy. Let’s look at some of the key subscription management trends to watch out for in 2021.
7 Essential Subscription Management Trends to Watch Out in 2021
More and more industries are increasingly becoming subscription-driven, everything from software, payments to meals and movies. Over the last few years, businesses and consumers quickly realize that they do not necessarily need to own every product they utilize and that registering for services and products on a subscription basis is a far better alternative.
According to data from Zuora, “subscription businesses grew 5X faster than both the S&P 500 and retail sector from January 2012 through June 2020.” Some of the reasons why both consumers and business owners love subscription products and services are:
• Low Price
• Discount and Reward
• Tailored Service
2. Business Owners:
• Predictable Income
• Long-term Customers
• Multiple Payment Options
• Less Customer Acquisition Cost
Now that you’ve got an idea why it is the right time to switch your product or service to subscription-based, here are few trends that you should know in 2021 if you are planning to move your business to subscription-based.
1. IoT-Powered Subscription Products or Services
IoT (Internet of Things), what is it? The definition of IoT could be the grouping and interconnection of devices and objects through a network (either private or the Internet, the network of networks), where all of them could be visible and interact.
IoT is now at the heart of every industry, from manufacturing, logistics, and agritech to healthcare, travel, and retail. It is predicted that by the end of 2025, almost 79% of businesses, including the local ones, will adopt IoT technology.
Connect your subscription business with a new generation of internet-enabled devices with the help of IoT and transform your existing subscription business process.
2. Cryptocurrency-Based Payments
Love it or hate it, but you can't deny that the cryptocurrency market is continuously growing. More and more businesses are accepting payments from their customers in Bitcoins and other cryptocurrencies.
Even payment processor giants Stripe once started to accept cryptocurrencies’ as a form of payment but had to stop because of the instability in the crypto currencies' prices. The cryptocurrency market is predicted to expand with a CAGR of 56.4% from 2019 to 2025. The international blockchain market will undoubtedly increase to $23.3 billion by 2023. As of December 2020, the cryptocurrency market cap is $265.545 billion.
Of course, you need to find out the best way to get around the payments regulatory concerns and the continuous changes in the cryptocurrencies' prices, but subscription businesses can't overlook them.
3. Newer Markets
Given how well subscription-based companies have done in the past ten years, they're growing nine to ten times quicker than the average company on the S&P 500 index. And these numbers are attracting more players and opening this form of the business model on markets that were dependant on the traditional model.
Who would have thought that companies like Mercedes and Porsche would offer subscription-based services to its customers? The subscription Business model is becoming highly-competitive and challenging day-by-day; every month, you'll see a new subscription-based product or service getting launched in the market.
If you're a subscription management service provider or a SaaS company, try to diversify your markets to get more subscription signups for your software or payment solutions.
4. Cloud Integrations
In recent times, cloud integration has acquired favor amongst companies, firms, and government firms that apply SaaS (Software application as a Service). Cloud integration is the method of aligning multiple programs to share data in the cloud. It’s a software distribution design in which applications are hosted by a vendor or company in a cloud-based server and provided to individuals.
The benefits of cloud integration for a subscription management company are:
1. Access personal data from any location.
2. Access information from any device with internet access.
3. Offer scalability to allow your clients or customers for future growth.
4. Integrate personal data such as calendar and contacts.
Suppose you’re a subscription management business and still rely on in-house servers even after this whole pandemic situation when things are still uncertain. In that case, we’d recommend moving or integrating all your company’s day-to-day operations into the cloud server.
5. Diversified Billing Models
Unlike Netflix, which charges a pure-play subscription from customers repeatedly every month, numerous companies acquire profits via a mix of persisting billing and one-off sales.
Subscription-based businesses are adapting more diversified payments and billings options to get more from their customers. Companies that aren't yet wholly welcoming the subscription version can move a tiny part of their business to subscription-based and increase their revenue.
Additionally, well-established subscription-based businesses must add one-off item sales and usage-based products to their profiles to reach new market sections and expand income.
6. AI Powered Operations – AIOps
AIOps automates and changes the occurrence management process, which commonly consists of 3 fundamental phases: Monitoring and discovering anomalies in system habits, making sense of data, and trial and error recommendations.
The key functional properties of AIOps are:
1. Anomaly Detection
3. Analytics offering Correlation
6. Machine Learning
The fact is that service-level expectations are rising, and subscription Ops demands are increasing due to the growth of subscription company intricacy, digitalization, and various other calculated efforts such as Cloud/Hana movements. Registration resources cannot keep expanding to equal needs.
7. S-Commerce will lead the Subscription Journey
S-Commerce, aka Social Commerce, is the activity of buying and selling products on social media platforms. The method of Social Commerce is applied to different social media can differ. But the bottom line is that purchases can be carried out partly or wholly within the social site.
It's also essential to note that it's not the social media companies doing the selling. Consumers can purchase items from retailers without needing to engage with them directly. Prominent examples include Facebook "Shop Now" stores, Instagram "digital price labels", and Pinterest "Shop the Look" pins.
Similarly, most SaaS-based products or services will look into strategies to get into S-Commerce and build strategies to gain potential customers and increase recurring revenues through subscriptions.
The future of subscription management looks great since more and more industries are trying to fit to adopt the subscription method, and next year will be crucial for the subscription industry. 2020 wasn’t as good as expected due to the global pandemic and ongoing financial recession. Still, the upcoming year will be one of the best in the history of the subscription industry.