In this decade, subscription-based services have proliferated significantly more. There are subscription-based services available today that can accommodate your viewing preferences if you're looking for entertainment in the form of well-made series or live sports. If you're lucky, you might even be able to get both through the same service. On a weekly, monthly, and bimonthly basis, subscription services are also offered for food, clothing, and carefully curated goods.

Positive Subscription Industry Statistics

People are becoming more and more willing to subscribe to services. The largest retailers in the subscription e-commerce sector generated over $2.6 billion in sales in 2016, according to a McKinsey & Company article from 2018. That amount was $57 million just five years ago.

Participating in the subscription market is made even more appealing by the fact that it draws from arguably the most relevant market. The demographic most "likely" to subscribe to an e-commerce subscription service is between the ages of 25 and 44, with an annual income of $50,000 and $100,000. In other words, people with disposable income who are willing to spend tend to subscribe to these eCommerce businesses.

It's also important to note that customers of subscription-based businesses are willing to have multiple active subscriptions. The average number of active subscribers' active subscriptions is two. However, a sizable portion of those who have invested in the sector have demonstrated that they are open to having even more accounts.

More specifically, approximately 35% of current subscribers have three or more active accounts. Just because someone has subscribed to an entertainment-related subscription service doesn't mean they won't venture further out into the water. If anything, once they have a taste of the industry, it makes more sense for them to invest in it.

Risks Associated with Continuity

There is no denying the risk associated with the industry, despite the possibility of success. There is no guarantee that they will become regular subscribers, even if you are successful in attracting a large number of people. On average, 40% of subscribers end their subscriptions.

Fortunately, businesses that can deliver quality services have demonstrated their ability to retain clients. Customers are more likely to stick around over the long haul, in particular when they sign up for services that are focused on offering particular products. 45 percent of those services' subscribers are willing to commit to ordering products for at least a year.

Although there are risks in the subscription industry, if you have a product or service you are truly confident will sell, you can make a lot of money with this kind of business and even experience significant growth in the near term.

Start Your Continuity Business Today

You might be interested in learning how to launch a subscription-based business now that you've read about its growth potential. Naturally, the task is a little trickier than you might think.

It's not as easy as developing a product or service, setting up a website where' people can sign up for it, and then relaxing. If you want to have any chance of succeeding, the entire process is much more complicated, and you must be fully committed to making it work from day one.

The following advice will help you plot the course for your subscription-based business's success.

Bring a fresh perspective to the table

Although the subscription industry is still not as big as it will be in the end, many players have already made significant investments in it. Whatever you intend to offer, there's a good chance that someone has already done so.

You can still pursue your idea in spite of that. Simply put, this calls for a more creative strategy.

Spend some time investigating the area of the subscription industry you're considering entering and finding out what the rivals are currently providing. If your only goal is to replicate the success of businesses that are more established than you are, you won't be setting yourself up for success. Customers are unlikely to switch to a new company even if you are certain that your product or service is superior.

To pique the interest of potential subscribers, you must make an additional offer. Potential clients' attention might be drawn by some unusual incentives. The truth is that you cannot afford to simply wait in line with your rivals. You need to stand out.

Don't make the pricing too complicated.

Pricing, especially early on, is crucial to the success of your subscription-based business. To see what others in your field are offering, you must once again conduct research. Most likely, you'll need to start off with lower prices. Otherwise, you won't be able to persuade anyone to cancel their current subscription.

You must make your price offerings simple for potential customers to understand in addition to starting at a lower price point.

Zuora, an enterprise software provider, advises new subscription businesses to launch with two or three pricing tiers. Later, when your clients are more accustomed to your services, you can introduce new promotions and hopefully persuade them to sign a long-term contract.

Make the payment process simple

You can focus on enhancing the customer experience now that you've identified your unique selling proposition and established the initial prices you'll be charging.

Making the payment process as simple as possible is crucial in this situation. You shouldn't make your customers go through a long process just to pay their monthly bill. For your customers, try to set up automated payments. Definitely a popular choice for merchants in this situation is negative-option billing.

You will require a high-risk subscription merchant account to do that. But it might be harder than you think to get one.

How to Protect a Merchant Account for Subscriptions

It is imperative for you to have a merchant account set up and operational because the majority of your customers will likely pay for your goods or services using their credit or debit cards.

The issue is that not all companies offering payment processing services are eager to collaborate with subscription-based businesses. For a number of reasons, the aforementioned businesses are regarded as high-risk. Some conventional banks believe that billing procedures used by subscription-based businesses are risky and subject to chargebacks or fraud.

You can concentrate on developing your customer relationships and expanding your product and service offerings by forming a partnership with a reputable high-risk continuity merchant account provider. You don't need to be concerned about payments not being received or customers complaining about your payment system because someone has you covered.