“Growth in the business is never by mere chance- It’s the result of all the forces working together”.
- JC Penny
The definition of business is a platform of well- balanced products, policies and brain-stormed ideas often with the focus of earning profits by aiming, at the people, for the people and by the people.
Any deft idea can be transformed into a business. We have often heard small businesses getting transfigured into big flourishing corporations within a heartbeat of time. How does it happen? What makes a business successful?
The answer lies in the ‘ideas’ which takes a business forward. Many businesses start on fresh ideas before hitting a wall, and from where the curve starts falling down as the expectations of the people exceed their calibre to keep implementing new innovative ideas. Then there are some businesses which thrive on groundbreaking ideas to the extent of earning the loyalty of their client relationships. Once the market penetration is done, the loyalty gets fairly sided to the company even after other new market competition emerges.
One such ground hauling idea has been the trend of ‘Subscription Businesses’.
Subscription businesses are basically business which enables end-users to repeatedly use any particular product instead of a one- time purchase by paying a recurring amount against that product or service. This idea was originally implemented in the 17th century but limited to only book clubs or music clubs.
The main aim behind this is to transform the industry from converting products to services.
Come 2019, this trend has created a huge wave in the global consumer market with subscription facilities extending to end number of products and services like-
Most of the companies in this global market preservation setting are opting for subscription deals rather than offering products for one-time purchasing. There are two types of companies in this forum-
- One which offers products and services for the only subscription and not purchases.
- The other allows the customer to choose between purchasing and subscription.
What has influenced such trends in the market-
The conventional definition of living has changed with the present generation, for whom the meaning of investment is changing.
For example, majority of people have abandoned the ideas of buying a car or a house and are turning towards subscription. With businesses in India like Zoom cars and hotel apartments, people are getting the freedom and the convenience to choose these luxuries as and when they want, keeping heavy investments intact for a rainier day.
How does the model work?
The process starts with choosing the type of product or service that the client is looking for. Usually, every establishment has a series of set catalogues with services and products laid out from where clients can choose according to their suitability.
After selecting the product or service, financing and collateral guarantees comes into the picture which enables customers and companies to decide on those options. Before approaching the financial institutions, companies should have all the necessary paperwork for the guarantor in place. Bigger the amount of loan, hefty is the collateral
After approval of the loan and other paperwork, the final step is for both the parties to come to a consensus and sign the final agreement citing all terms & conditions. This could a digital agreement or otherwise.
The best part about subscription business is its differentiating quality as every concern will have something unique to offer with the service marketing it as something superior.
The concept of ‘To own is to buy’ is gone, as people are more comfortable with convenient ownership. The subscription economy seems like a perfect option to cope with the rapidly changing demands of the clientele. It’s no longer about having many options, it’s about having tailor-made carved out curated products at the right time and place. With revolutionary trends such as these, the definition of the consumer market and the criteria of client fulfilment is bound to change.