Complimentary Access | What Every CEO Needs to Know About Subsciption Business
EXECUTIVE PERSPECTIVES - GROWTH STRATEGIES
What Every CEO Needs to Know About Subscription Business
March 19, 2021
What are the strategic opportunities and risks in
adopting subscription business models?
• How can organizations create strategic differentiation
• What tools, data, process
and organizational models
are needed to create successful outcomes with subscriptions?
Subscription business models remain the holy grail
of the modern economy. Customers expect it, investors value it and companies are looking for ways to
leverage this concept. Of the companies created in
the last ten years, very few have achieved valuations above $1 billion without some sort of a subscription offering. Yet, despite all of the attention,
subscriptions are poorly understood and still represent only a small fraction of global GDP.
Subscription businesses may appear deceptively simple. After all,how complex could it be to create an offering around some content or a service for $5.99 per month, set up a website and begin to market to millions of potential customers with a hope to create billions of dollars in new value.
A successful subscription business can create transformative value
by creating non-linear change in growth trajectory and a step-up in valuation multiple. Still, many of the subscription start-up ideas fail or achieve relevance. This is a complex endeavor, fraught with
risk and extremely sensitive to execution.
In this research report, we have compiled a simple guide to the key concepts of a subscription business, including questions every
CEO should ask to track and grow a successful business.
Define the Relationship, Not Just the Pricing Model
To be successful in subscriptions, leaders need to take their thinking out-side the box of any specific pricing model. Subscription business is not about a $9.95 per month price model.
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