Subscription economy changes the way we do business – for the better
One can almost say subscriptions are a way of life. Pioneered by magazines and newspapers to provide a valuable and reliable service to consumers, the subscription services of today have exploded to provide consumers a repeatable, dependable supply of products ranging from pet food, razors, clothes and even entertainment. Consumers love the convenience: no need to worry about ever running out of razors, a steady supply of entertainment without having to leave the couch, gourmet food without having to shop for exotic unknown spices. The list goes on.
The subscription model works not only for consumable products but also service-based solution offerings. One can say prepaid legal services is a type of subscription. A monthly fee guarantees access to legal services when needed, with no worry about having to search for an available attorney.
B2B adoption of subscription services model on the rise
Subscriptions are not merely for the convenience of consumers. The B2B subscription service model has been growing in the past few years, with benefits for both providers and customers alike. In fact, American market research company Forrester predicts that more and more businesses will make the shift to a subscription model in 2018 (both selling and purchasing).
Lower total cost of ownership, convenient and easy to budget
One of the biggest reasons why the subscription services model is appealing to businesses is the lower total cost of ownership and the added support services normally offered in a subscription service.
Let’s take Microsoft Office, a standard in most businesses with its very familiar suite of programs such as Word, Outlook and Excel. Remember the days when there were multiple versions of Microsoft Office within the same company? Newer employees had the newer versions, while older employees often used older versions. Even with a business license to reduce cost, upgrading every employee to the latest versions was often not a priority, except when there was a security breach. Remember the frustration caused by version compatibility issues? Those were the days.
With the release of Office 365, things have changed. Now businesses can pick subscription plans guaranteeing access to the latest versions of their suite of products for all their users. Plus, there are additional benefits such as cloud storage, Microsoft support via chat and much more. Even with the extra benefits, the cost of a 12-month subscription for Office 365 is actually less than purchasing a program without the subscription plan. Since the subscription model eliminates the version compatibility issue and adds online support, the total cost of ownership for the subscription model is indeed lower than an outright purchase.
Enhanced customer service, additional offerings
Customers tend to experience stronger relationships and enhanced customer service in the subscription services model. This higher engagement level is due to the shift of focus made by subscription service providers from product sales to becoming solution providers and experts. With a strong sense of accountability to the customer, every customer engagement becomes an opportunity to provide added value over time.
Most subscription plans employ all-for-one pricing, which opens up many other premium services and offerings at no additional charge. Some common premium offerings within the subscription model can include:
- Immediate access to full suite of solutions without à la carte pricing
- Guaranteed access to the latest products or updates
- Front-of-the-line positioning for technical support or assistance
- Discounted pricing on peripherals or add-ons
- Sneak peek into future new releases
- Help shape new releases by serving as a beta tester
Shape or influence future product roadmaps
We now know the benefits of a B2B subscription model for the customer. But if it costs less and requires more support, what is the benefit to the provider? Subscription service providers find the lower initial gains a worthwhile investment to develop customer loyalty and a consistent revenue stream.
The investment also affords providers the opportunity to support the research and the development of future products. Current subscription customers not only benefit from the development of upgrades and new products, they are well-positioned to provide input and feedback that can shape or influence the product roadmap to one that is mutually-beneficial to both the provider and the customer.
What’s the future for subscription services in the metal fabricating industry?
As more technology and Software as a Service (SaaS) solutions are embraced such as CRMs and ERPs, the need for added connectivity will drive the adoption of subscription services. These services will in turn provide solutions to improve workflow and efficiency, increase profitability, agility and scalability for manufacturers.
Who is AMS Controls?
AMS Controls is a global provider of roll forming controls, committed to helping manufacturers achieve the highest level of visibility in their production process. In business for over 40 years, AMS Controls provides controls and integrated solutions with best-in-class support.
AMS Controls’ solutions are available as a subscription service, pairing world-class controls with premium support to improve productivity and profitability, reduce scrap and keep manufacturing facilities running. Click here for more information on AMS Controls’ premium support and controls for the metal fabricating industry.