Once you’ve decided to go with a subscription website, the next important decision is to figure out which subscription model is best for your target market. But what are the different subscription models available to you?
Let’s take a closer look.
What Are Different Subscription Models?
Different subscription models can basically be split based on pricing strategies and content offerings. Subscription models are experiencing a boom right now and are popular with streaming services, SaaS platforms, newspapers, and just about any industry you can think of.
To start, let’s run through some pricing models that you could select from:
Freemium Sign-Ups
In a freemium model, you offer a basic version of your product or service for free, while premium features are accessible only to paying subscribers. It’s important to remember that this model in itself won’t generate recurring income, but it functions as a sales funnel to offer upgrades to your users.
For example, companies like Spotify and Dropbox use this model, where users can enjoy limited free services. But users can also upgrade at any time and pay for premium features like additional storage or ad-free music.
Fixed-Rate Subscription Model
Fixed or flat rate subscriptions offer a simple pricing strategy where subscribers pay a fixed fee, usually monthly or yearly to access your products or services. This is the most straightforward and widely used model – think streaming services like Netflix, or even gym memberships.
By offering unlimited access to services for a fixed fee, you take the guesswork out of pricing for both you and your members.
Usage-Based Model
Also known as the ‘pay-as-you-go’ model, your members pay fees based on their usage of your service. This model is commonly used in industries like cloud providers and mobile phone operators where the fee varies depending on how much the customer uses the service. You can set your own usage limits to trigger upgrade prompts for your members.
Tiered Subscription Model
The tiered subscription model is a pricing strategy that offers different levels of access or features at different price points. Companies offer subscription plans, each with different benefits or limitations, allowing customers to choose the plan that best fits their needs.
For instance, many SaaS platforms offer Basic, Pro, and Elite packages, each with additional features or higher usage limits.
Loyalty-Based Subscriptions
With loyalty-based subscriptions, your members subscribe to a service or product on a recurring basis and they receive benefits, rewards, or special offers as part of their subscription.
Companies may offer escalating benefits to encourage their members to stay subscribed for longer periods. Amazon Prime uses this model to offer faster shipping, exclusive deals, and access to digital content available only to their loyal subscribers.
So, that covers pricing models. How about actual product or service delivery? Turns out that there are a few of these too when planning your business:
Mentorship or Coaching Subscription Models
These put you at the head of the service as “the guru” that’s there to help people who want to get better in some specific area. It doesn’t matter if it’s cooking, dating, guitar, or bow hunting… people in all sorts of hobby niches want to get better at their craft, and some will pay to be mentored or coached by someone skilled in the area, such as yourself.
Community Subscription Models
Birds of a feather… sometimes fork over cold hard cash to join groups filled with like-minded people. Car clubs are a good example of this since people with a hot car often like to talk about their model of car with other enthusiasts. Others who benefit from community memberships are support groups for terrible conditions such as ALS.
Whatever the niche, if people are seeking association with others in the niche, you can step in to fill the gap, creating a forum or community where people can easily interact.
Data Access Subscription Models
If data is hard to source in your niche, it would probably be worthwhile combing the interwebs for it and then packaging it up into a nice resource for paying subscribers. That’s what we’ve done at Net Net Hunter, and it’s worked beautifully since 2010. You’ll have to judge how in-demand the data is, and how hard it is to get. If it takes some significant footwork to uncover, and it’s really in demand, then you could have the makings of a great data service.
Streaming Subscription Service Models
Everyone has heard about Netflix, and cable is still a thing in most parts of the country. The idea here is to produce some great content on a continual basis, and then make it available as a subscription on your own platform.
This is probably the hardest subscription model to pull off, requiring the most work, technical know-how, and time investment (not to mention capital). So, we wouldn’t recommend this approach, at least not if you’re reading an article about the different subscription models available.
Each of these subscription models serves a unique purpose, depending on your product, target market, and business objectives. However, you don’t have to limit yourself to only one model. You can combine elements from different subscription models to work to your advantage.
Read next: Is A Subscription Passive Income?
