Subscription services: why are you stuck on them?

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It’s hard to imagine how we ever managed without online cinemas, music services, and apps for controlling expenses. Following demand, more and more companies are implementing a subscription business model, and major players are even creating subscription ecosystems, selling one subscription to several services at once.

Let's take a look back at the predecessors of today's much-loved subscription services and try to understand the secret of their appeal to users. The article will be especially useful for entrepreneurs, sales and marketing managers, who will be able to better understand the possibilities for implementing a subscription in their business, as well as look at it through the eyes of customers.

When did the subscription appear?
The history of the subscription sales model goes back centuries. As early as the uganda whatsapp list beginning of the 17th century in England, one could subscribe to regular deliveries of grain, water, and other crops. In the 1660s, a subscription appeared from insurance companies in case of fire. In the 18th century, the idea of ​​subscriptions was picked up by universities and charities, and in the 19th century, by theaters.

In the 20th century, subscriptions to traditional media business products: newspapers, magazines and books, began to enjoy great popularity. In Russia, thick catalogues with lists of printed publications appeared at the post office. You can still choose a newspaper or magazine in them, subscribe to them and then regularly receive them at home.

When did the subscription appear?

With the development of information technology, more and more brands began to offer products via the Internet, including by subscription. One of the most famous is the American service Netflix. In 1998, its founders Reed Hastings and Marc Randolph came up with the idea of ​​providing DVD rentals. The client could choose a movie without leaving home, and a courier would deliver the disc right to his doorstep. Since 1999, the company has been working on a subscription basis: for only $9.99 a month, a user can still rent an unlimited number of movies, but only one disc at a time. And in 2007, the Netflix streaming platform appeared, which began offering movies online also by subscription.

Benefits of Subscription
The growth of the subscription market is a global trend, and Russia is no exception. According to an analysis by the research agency EMarketer, in 2020, sales of goods and services by subscription in the United States increased by 41%. And according to forecasts from a report by another research company Frank RG, but already based on trends in the Russian market, the number of subscribers in our country should grow by 30-40% by the end of the year. This trend is quite understandable: the subscription model has several advantages - both for users and for businesses.

…for business
Predictability of sales. Subscriptions involve regular payments while the customer is using the product. This means that the company can more accurately forecast profits and plan the budget. Knowing the number of paying users and their average lifetime makes it easier to estimate expenses in the next period.

Loyal customers. If a person has been subscribed to a product for a long time, they are likely to like it. And if so, they are likely to recommend your product or service to their friends, because people love to share stories from their personal experiences.

Opportunities to improve the product. Having a loyal customer base, you can conduct regular research and surveys. You can find out why users choose your service, what they are happy with, and what they lack. In this way, you can improve the product and make it more attractive to customers.

Saving on attracting new customers. New users are expensive: you need to spend money on advertising, win in the competitive struggle among similar offers. Subscriptions help to form a loyal customer base and work to ensure that people continue to use the product.

Combining into multi-service subscriptions. Some corporations offer services, discounts and cashback for several services at once under one subscription. Ecosystem subscription is the most common business model in Russia. According to the same Frank RG report , about 20 million Russians are subscribed to such services.

Ecosystems can not only provide users with services of affiliated organizations, but also establish partnerships with third-party companies. If a service has a subscription, it can join such a corporation and receive an additional flow of customers.