Nigerian Businesses Can Now Adopt a Subscriptions Model
A subscription business is one where the customer pays a recurring fee for a continuous access to a product or service, rather than a one-off fee. For example, customers subscribe to DSTV by paying a recurring monthly fee to have access to their favorite stations.
The subscription model is not new and it is traditionally common with recurring bills like utilities, cable and magazine subscriptions, insurance premiums, gym and club memberships and more. In recent times, it has become more popular to see the model being used in areas like e-commerce, enterprise software, media content, flight and hotel subscriptions, grocery and beauty shopping, professional services and many more. It might be safe to say that any business can be structured as a subscription business depending on how it is packaged.
The subscription model is interesting because it offers great value to both businesses and their customers. For customers, it helps them stay within a budget and plan accordingly, gives them the convenience of having constant access to services they want without any extra effort and also the value added services and customer care that comes with the continuous relationship. For businesses, the major reasons to choose a subscription model include the ability to predict revenue, effectively plan resources and build a strong relationship with customers that creates trust and loyalty over time.
There are a number of companies globally whose pricing model is traditionally one-off but have been able to adapt the subscription model due to it’s enormous benefits. Such companies include:
- Amazon Prime is a product of Amazon.com that gives members access to one-day delivery for eligible purchases for a membership fee that can be paid monthly or annually.
- Target Subscriptions allow it’s members to get everyday essentials delivered on a schedule for a fee.
- Drugstore.com offers 10% or more off customers’ orders and free shipping when customers sign up for “auto-reorder” which is a monthly subscription.
- Dollar Shave Club lets it’s members simply select one of their blades, pay only for the cost of the blade, and they send the blade right to member’s door every month for a fee.
- The Honest Company sells organic and essential family items in packaged bundles that they package and ship to members monthly for a fee based on their selection.
- Blue Apron is a service that helps people discover a better way to cook by sending them curated ingredients monthly.
- Craft Coffee send different variety of coffee to members for a fee based on the interval and specs they have pre-selected.
- The Club W recommends and send members wine on a regular interval based on their palate profile that they have set.
- BirchBox send their members monthly beauty box of five samples tailored to their skin, hair, and style for a fee.
- Society is a membership salon that offers their members unlimited access to hair care for a monthly fee.
- John Allans is a membership based men’s grooming club. Men pay a monthly fee for services such as Scalp Massaging Shampoo, Conditioning Treatment, Hot Towel, Haircut, Manicure, Shoeshine, Beverages
The companies above and many more are winning in their respective markets with the subscription model because the infrastructure that supports a subscription business model exists. The infrastructure includes a payment system that enables them easily accept and manage these recurring payments and subscription plans without any friction or much effort from their customers. There is also trust and confidence on the part of the customers that these companies will be responsible and transparent as they seek to build a long lasting relationship with them.
We have built Amplify to provide the necessary payment infrastructure and support system for the subscription model to thrive in Nigeria. Amplify is a complete suite of tools that includes a payment gateway that supports automated billing, a recurring billing software to easily create and manage different plans, analytics that help businesses make better decisions and more.
If you run a subscription business in Nigeria or you are considering converting your customers to subscribers, perhaps you just want develop a stronger relationship with your customers, feel free to check out www.amplifypay.com or send an email to firstname.lastname@example.org.