When it comes to business management and the world of software development, the type of business model matters more than you might think. The evolution of business models often results in the most significant changes in revenue. For example, in the gaming industry, the change of business model to subscription sales changed the face of massive multiplayer online (MMO) gaming.
As a business owner, you are responsible for ensuring your company makes the most out of every opportunity. Let’s look into the many reasons why subscription sales models are hugely popular with regard to software licensing and why you can benefit by making the change.
#1: It’s easier for everyone involved
The subscription-based model tends to be easier for everyone involved, especially the end-user. It’s a busy world, and most people prefer to get what they want immediately and not worry about anything else. It develops a more seamless experience for most customers, developing an effective customer journey where the end-users don’t have to shop around for everything they need.
With the subscription-based model for software and products, the customers get what they want without jumping through hoops. It’s an exciting business model to try, especially when it comes to staying compliant with licensing. Typically, effective software licensing involves subscription-based models.
#2: Your business has an easier time predicting the revenue stream from subscriptions.
Compared to sales and other business models, the subscription-based model can make it much easier for your company to predict your revenue stream. Moreover, considering that it involves repeatedly paying over a specific time frame, it gives you an easy rough estimate of overall revenue. Such a thing is essential for company owners trying to figure out the ideal budget for their business endeavors.
With a subscription-based model, it becomes much easier to figure out your next move, especially regarding marketing budget and anything involving finances for your business.
#3: Subscription-based models encourage interaction between customers and business.
The thing about subscriptions for a business is it opens up lines of communication between the company and the end-user. It is especially useful for those who want to make the most out of social media, as subscription models typically have the most vocal user base. As a result, the end-users are more likely to provide feedback, which can help businesses grow and ensure that even the most inexperienced company owner has a chance to elevate their standing.
#4: It’s incredibly lucrative.
Last but certainly not least, one of the most significant reasons to go for subscription-based models (whether for software or otherwise) is that they can be more lucrative than many other business models. It’s why the MMO gaming industry — and the current mobile gaming industry — had the chance to experience something of a renaissance. This is because subscriptions are a much more lucrative method of doing business.
It’s a no-brainer for most companies to try the subscription model for software development, as it can help businesses grow without taking too many risks in the process. It’s well worth the time and effort.
