Subscription business model: The key to business stability
Written By Paul Wallett, Regional Director of Trimble Solutions Middle East and India
Construction companies and projects have constantly explored ways to navigate industry challenges and stand out in this fast-evolving and competitive digital market. The integration of innovative tools and solutions such as software technologies for work processes has been proven successful but investing in them is still expensive for most companies. This has driven digital solution providers to shift and adopt a subscription-based business model as it is more cost-friendly, flexible, and convenient, providing firms opportunities to retain customers.
The subscription business model is not an alien concept as it goes back to the 1600s introduced by newspapers and book publishers. However, recent years witnessed a notable growth in the application of this model to almost every field and industry. Driven by the need to retain customers in this fast-evolving and competitive digital market landscape, companies have started integrating subscription-based models. Over the last years, subscription has become a booming business, and the construction sector followed suit.
The general shift towards this business model has led to a stable, predictable, and regular profit flow. Software solution providers have started offering multiple payment options rather than an upfront charge for a product. Having the option to pay monthly or annually has encouraged construction firms to increase investment in new tools and software technologies, which are often not affordable at a one-time payment scheme. It presents subscribers with the option to choose the best subscription package that suits their budget—both the technology provider and the customer benefit from this arrangement, and easier for them to maintain stability and affordability.
Convenience has always been a significant factor in customer retention, and subscription service is also winning in this aspect. Thanks to the advances in cloud-based infrastructure and other smart tools, digital payment interfaces have provided seamless setup and processes of payment methods. In addition, customer services are also becoming more convenient, with most software publishers offering packages with a regular and timely assistance for any related concerns. This setup allows subscribers to feel more connected with providers, leading to a higher customer satisfaction level. It also benefits the provider as it opens opportunities for feedback and improvement.
Businesses that offer subscription-based models also gain more insight into customers’ preferred solutions and products. Subscriptions paved the way for comprehensive understanding and analytics on consumer behavior, which can be leveraged for product enhancement, refining subscription models over time, and predicting the market.
To some businesses, converting to this model requires complex processes and major adjustments, particularly technical aspects. However, with the availability of high-speed internet connection, advanced technological infrastructure, and other smart tools, subscription models have become easier to implement.
The increasing digital transformation and innovation, coupled with changing customer preferences, will further heighten market competition in the future. The ability of companies to adapt and be flexible in their business models will determine customer retention. Growing a business greatly depends on customer loyalty, and subscription can become the anchor in gaining this loyalty.