Offering customers a subscription service can bring a lot of flexibility to your business.
No doubt about it: Everyday life has taken a turn and embraced a subscription mindset.
If you want proof, take a peek inside the modern home. People everywhere enjoy curated entertainment courtesy of Netflix and Spotify. Their refrigerators and freezers are stocked by food delivery services like Freshly, HelloFresh, and Blue Apron. And stylish looks from Stitch Fix and Le Tote hang in their closets awaiting their debut.
All of these services are delivered via subscriptions, and they account for a lot of money. A study of 2,500 random consumers by the Waterstone Management Group found that respondents spent an average of about $237 every month on subscription services.
In this era of supreme waste-cutting — all without cutting corners — it seems only natural that small and medium-sized businesses embrace subscriptions to integrate services of the future into their workflows without breaking the bank.
The Rise of the subscription-based business model
Many growing corporations already embrace the benefits of a subscription business model. Take the ubiquitous use of software as a service, or SaaS, for instance.
SaaS operates as a game-changer, slashing the costs businesses usually must incur to license and maintain platforms with potentially short shelf lives. Having the ability to spread the cost of this necessary expense over several months makes budgeting easier. It would also be a welcome change for small and medium-sized businesses, which respectively spend 6.9% and 4.1% of revenue on IT each year, according to a study by Alinean Inc. Instead of investing precious dollars in expensive IT infrastructure and resources, organizations can free up capital with monthly SaaS plans and enjoy the highest levels of service for system reliability and availability.
Aside from offering long-term infrastructure and operational savings, the benefits of a subscription model for software are numerous. For one, the most renowned SaaS providers regularly update and tweak the software to meet user and economic demand and feedback. This means emerging companies get top-shelf products, leaving them free to disrupt even legacy competitors without losing a beat.
Of course, no one said that subscribing to SaaS was the only type of on-demand choice to get ahead in business. Far from it, in fact. Office space providers like the highly customizable WeWork have adopted a subscription-based business model, too.
How does pay-for-use work in real estate? In WeWork’s case, smaller companies and startups rent one of its shared workspace locations, paying an upfront retainer and monthly membership fees instead of entering a multiyear commercial lease. If the organizations eventually need more space, WeWork finds them larger accommodations; if the companies need to cut office space to cut costs, WeWork also helps them do that. Plus, downsizing within a WeWork building means not giving up standard amenities such as high-speed internet or access to conference rooms and common areas.
Want yet another example of subscription-based workplace options fueling corporate savings and efficiency? Affordable subscriptions to cloud-based collaboration tools enable team members to work wherever they want without losing a sense of unity. Forget about the need to be in the same room. Today, top talent can come together without leaving their home offices. No travel expenses, no waiting, and no operational hiccups — just a high degree of agility and efficiency.
The bright future of subscription services in the workplace
Have you felt like unnecessarily rigid and old-school operational solutions sometimes hinder your company’s ability to pivot? Though you may not be able to use subscription-based business services to solve every cash flow conundrum, team dilemma, or market response, consider the following strategies to determine which subscriptions could be right for you:
1. Reduce fixed overheads and scale through subscriptions.
The more fixed overhead expenses you can move to variable alternatives, the greater your agility and liquidity. Go line by line through your budget and look for items you can swap out for subscription-based alternatives.
For instance, video conferencing and related collaborative solutions could save you in areas such as rent for office space, furniture, and utilities. Even if the monthly subscriptions require a one-time fee to join, the overall savings can be significant. And the less capital you tie up in fixed costs, the more you can invest in growth-focused activities like sales and manufacturing.
Other places to consider exploring the benefits of a subscription model include your workspaces. By right-sizing your rent or lease outlay, you make sure that office space grows as your business grows rather than committing to a lengthy lease term with excess space that you hope to use sometime in the future.
2. Use your corporate savings to reduce and optimize salary exposure.
With record-low unemployment, finding and hiring great talent has become more challenging. By leveraging a subscription-based business model to appeal to remote workers, you can onboard amazing superstars from anywhere in the world.
At the same time, you can limit your salary exposure by paying the going rate for each employee’s region. Living in the heartland costs a lot less than living in the Bay Area, for example, so you may be able to stretch your payroll budget by recruiting people who reside in places with a more moderate cost of living.
Of course, the subscription model you choose must live up to modern needs if your company decides to go primarily virtual. Look for a collaboration solution that delivers high-fidelity audio and video and interactive intelligence, which ensures participants who aren’t in the same room feel engaged and not held at arm’s length. Test these tools out internally several times, focusing on specific features like the ability to share your computer screen easily, record meetings, whiteboard virtually, and continue discussions via chat.
As a side note, some of these services of the future will allow you to record meetings for later reference as well as to transcribe them automatically using AI-enabled software. Accurate transcriptions of important meetings leave you and your team members with a fast and precise way to stay productive and curate historical data.
3. Find opportunities to use subscriptions to save on travel.
The ever-changing costs of fuel can take a noticeable chunk out of company travel budgets. Before you insist on in-person meetings with colleagues, clients, job candidates, or vendors, consider whether you can rely on a subscription-based communication platform instead. Even if you eliminate just a few meetings every week, you could save thousands of dollars over a quarter. When you add up everything from planning your travel to time away from your desk, one of the benefits of a subscription model is its ability to help you realize just how expensive face-to-face conversations can be.
Yes, you want your remote meetings to retain a sense of camaraderie, intimacy, and effectiveness. Social scientists tell us that the vast majority of communication involves nonverbal cues, which means a high-quality video conferencing platform is essential. The Electric Power Research Institute, for instance, uses video conferencing to brainstorm across multiple labs and workplaces quickly. The institute’s use of video conferencing has even supplanted its need for in-house meetings and some in-person job interviews.
Not sure your team will buy into the idea of embracing virtual meetings rather than in-person huddles? Begin slowly with internal virtual “gatherings” until everyone gets the hang of the software and its perks. At the same time, push a video-first culture to help in-office team members create human connections with remote workers. As your team increases its video conferencing acumen and comfort level, employees will start to look for opportunities to invite others to virtual meetings to build bonds, foster dialogue, and win business.
Small and medium-sized companies finally have choices, and those choices include the ability to stretch funds far beyond what was possible before the internet. By adopting an on-demand, subscription business model mindset, corporate leaders can level the playing field without losing momentum or sacrificing limited financial resources.