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During the past months, we have seen a dramatic shift in consumer behavior. One of these major shifts relates to the astronomical rise in the demand for subscription based services or solutions, as opposed to the idea of first owning and then consuming something.

In this post, we will be covering some of the major factors driving this heightened demand for subscription based businesses. Then, we will also discuss how these subscription based pricing models are working in favor of both consumers and businesses alike.

The Pandemic Catalyzes Demand for Subscription Oriented Businesses

Long Term Customer Retention

This is a challenge for most businesses in itself. There are few businesses across the globe that have “cracked the code” for keeping customers interested and glued to their product, service, solution, or any other commodity for that matter.

Subscription based services, on the other hand, ensure this for both ends in a very convenient way. A business that offers subscription based pricing will always remain on its toes to meet and exceed consumer expectations, otherwise a switch could happen.

When it comes to the consumer side, the foremost element is lower cost when compared to the idea of absolute ownership. Further, the consumers of subscription based services keep getting updates and upgrades at a much higher and consistent pace.

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Pay for What You Actually Consume

The traditional approach towards consumer behavior has been to buy or procure more than what’s needed, lest you may require it sometime in the future. Subscription based pricing models eliminate this “fear of missing out” among customers.

Consumers confidently subscribe for the service or solution, only to the extent to which they need it in the real time. They do so with the expectation that if their need decreases or increases, they will be able to scale the subscription up or down as and when needed.

Higher Market Share

During the pandemic, many businesses that evolved their services or solutions to a subscription based pricing model achieved a higher and much rapid market penetration. Even amidst a time of declining purchasing power, businesses were able to boost revenues.

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Better Customer Experiences

The updates or improvements to ownership oriented products, services or solutions span a long time. Consumers have to wait for the next version / generation of such items to deliver the improvements, which means spending even more money from scratch.

Subscription based services or solutions are much more agile when compared to their ownership oriented counterparts. Improvements and enhancements are an ongoing process, and happen in the background. This in turn improves customer experiences.

Related: 10 Compelling Reasons SMBs Need Cloud Computing

Subscription Models Worked Wonders for Cloud Computing

Apart from the agility, scalability and flexibility of cloud computing solutions, the subscription based pricing model of cloud services is yet another factor behind such a prolific success of the Cloud.

Without investing huge sums of money on owning expensive data centers and other IT hardware, enterprises were able to tap into the on-demand IT resources of Cloud Service Providers (CSP) like dinCloud. This was made possible by the Cloud’s subscription model.

Predictable Revenue Streams

In some cases, the revenue that businesses generated from subscription based services and solutions was higher than traditional delivery models for a service or solution. It is not just about higher revenues, rather subscription based services also bring in steady revenues.

So long as the consumer is deriving the promised value from any subscription, the likelihood for dis-continuation or switching over is very low. Businesses with stable revenue streams are better perceived by both consumers and investors alike.

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According to an estimate, the total size of subscription based services and solutions could attain a whopping US $1.5 Trillion mark by the year 2025. This estimate alone speaks a lot about the true potential that still exists in the subscription based economy of the future.

Subscription based services give rise to stable and consistently growing revenues. This not only boosts the confidence of investors and other stakeholders, but also puts an enterprise in a much better position to channelize these revenues towards rapid expansion.

If you are in the market for secure, agile and flexible cloud solutions that are offered as a subscription, then dinCloud is just the right Cloud Service Provider (CSP) for you.

Even among subscription based cloud service providers (CSP) out there, dinCloud stands out with its fully transparent flat rate pricing model for its cloud solutions.

Before you subscribe for our cloud services, why not Take a 14 Days Free Trial first?