Subscribing for Services VS Owning of Assets

Factors differentiating a subscription

Subscribing for Services VS Owning of Assets – A Clive Angel Blogpost

The Subscription Economy Explained

It’s not a secret that many businesses are gradually gravitating towards the subscription business model. Accordingly, lured by changing consumer buying habits. Whereby, users prefer the benefits of a simple, cost-effective and hassle-free experience.

Significant numbers of companies are exploring launching subscription-based services. Ultimately, the shift from a product-based to a services centric economy will transform purchasers from once-off into annuity-based services.

Subscription Services provide a range of customer benefits

Subscription economy provides customers with access to an all-inclusive, reliable and transparent service offering. Moreover, in return for a fixed monthly payment, customer’s are guaranteed ongoing use of the product or service.

For the customer who chooses “paid for usage” as opposed to outright ownership. In addition, it presents a markedly different risk profile and funding proposition. Given that, ownership comes with the hidden costs of usage. Including; maintenance, insurance and general upkeep.

An asset procured on a subscription provides instant access to the latest technology and product updates. Comparatively, when the owner of an asset needs to upgrade it involves having to sell the original, in order to, purchase an updated version. Resulting, in an increased cost of ownership, as well as, waiting times for the upgraded version.

Subscription Services are customisable as opposed to off the shelf

Tailored subscription services allow users to select products customised to their specific needs. Different from, purchasing a product fit for a specific purpose. Therefore, allowing personalisation and providing customers with the opportunity to ”get exactly what they paying for.”

An additional benefit of subscription services is structured payment plans.  Chiefly, to align customer costs with the benefits derived from usage. Henceforth, providing customers with a greater value proposition then if they paid upfront and only enjoyed benefits over the life of the asset.

In effect, the opportunity to align cash outflows with the benefits obtained from usage creates a “win-win” proposition for both the user and provider services.

How to build a Subscription Business Model



The Subscription Economy puts the customer in control

Finally, the ongoing nature of subscription services puts the customer in control. As a result, they are in a position to provide meaningful input and feedback. Consequently, this feedback will have a positive impact on improving the offering. Accordingly, creating increased value for new users.

In comparison, when purchasing an asset, after payment and ownership is transferred the impact of customer feedback is less relevant.

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BlogIdeasThe Subscription Economy

Subscribing for Services VS Owning of Assets

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