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The Rise of the Subscription Business Model

Tag: business success

The Rise of the Subscription Business Model
Mohab Growth Hacks 0

The Rise of the Subscription Business Model

Subscription business model is one of the most promising emerging models and involves charging the customers a recurring price at regular intervals. This model eliminates the need to make a large upfront payment for buying a product or service. While earlier this model was popular with print media and other specialized domains such as service providers, now more and more business segments are experimenting with subscription business model.

Subscription model is quite resilient and may be customized to meet the specific requirements of a business. While some models provide a fixed menu of products or services, others may offer unlimited use of their offerings for a fixed period of time. The flexibility of the model is one of the biggest reasons behind the success of this phenomenon. However, this is not the only advantage of this model. With a subscription business model, you can reap the following benefits:

  • Predictable Revenue Stream: The subscription model allows a business to make educated prediction about its future revenue and therefore is immensely helpful in planning and budgeting.
  • Customization: The subscription model is also conducive to customization of plans. You can design different types of subscription payment schemes to meet diverse demands of your customer base. Such customization also enables the business to attract new customers as they can get payment terms and conditions to suit their requirements.
  • Optimizing Costs: Since the subscription model allows businesses to predict their demand pattern, it becomes easier to design purchase plans in an efficient manner. Such planning enables the business to optimize their costs and processes.

Once you have decided that you want to turn your business into subscription-based enterprise, there are certain pointers you need to keep in mind. These points will help you in smooth transition and efficient execution.

  • The Right Pricing: Just like conventional revenue models, even subscription model requires the business to determine the right price point. Since your subscription plan will not only impact your current customer base but also the size of your potential market and future subscriptions, it is important that you pay proper attention to different factors such as the income level of your market and the likely demand to determine the price to be charged.
  • Simplify Billing: While it is important to have simple yet clear billing in any business model, the need for simple billing is all the more important in subscription-based models since the invoices are sent more frequently. The businesses should ensure that the bills provide all the details in a concise and clear manner. Reliable invoices help in creating transparent and strong processes, inculcating confidence in customers.
  • Develop Deeper Customer Relationships: Robust customer relationships form the base of the subscription model. As the customers grow, it is important that the quality of customer relationship processes is maintained and improved over a period of time. As the subscription model entails more frequent interactions with the clients, it is important that the business is sufficiently strong to take on the additional burden.
  • Measure and Iterate: The success of the subscription model largely depends on a business’s ability to measure the results and take swift actions to remedy the situation. As the model is still in the evolution phase, it allows for customization and quick changes. It is equally essential that the processes are scaled in response to the introduction of the model. Such a model may also require frequent changes as you may have to introduce more innovative plans to meet customers’ requirements.

The subscription model is here to stay as more and more verticals pick it up for boosting their customer base. While the model offers many advantages, it also has certain shortcomings such as customer fatigue, wherein, clients may grow weary of the same products and services. The model also requires the business to stick to scheduled deliveries with minimal deviation. If the supply side is unpredictable, it may not be possible for the business to maintain such delivery schedule for its customers. Overall, it is important to ensure that the subscription model is suitable for the business in question and that adequate attention is paid to different factors while designing this model for implementation.

5 years ago
Startups living in uncertain times?
Mohab Ecommerce, Guest Posts 0

Startups living in uncertain times?It goes without saying that startups have transformed how we interact with the world around us in the past few years. If you’ve traveled to any of the world’s major cities in, say, 2010, you would have likely checked into a hotel and hailed a taxi cab to take you there. Today, you can expect greater convenience, value for money and, possibly, a chance to meet locals at a click of a button through Airbnb and Uber.

The trend carries on as I type this blog entry. Uber, an established company by now, is being made to tweak its operations to keep newcomers like Bird, which now rent scooters as an affordable, convenient and reliable means of transportation, from eating into their market share. Also consider how corporate giants such as HBO, Amazon and Disney are being compelled to launch their own streaming services to reclaim their market shares from the likes of Netflix and Hulu.

But the truth is that startups can only flourish in healthy economies. Successful startup enterprises, after all, reflect harmonious matchmaking between entrepreneurial creativity and innovation and an optimistic outlook by investors. Perhaps it’s within our nature as humans to be creative and problem-solve, so the entrepreneurial spirit will probably never flag. But access to capital can be a problem. Even the most revolutionary business ideas of our time couldn’t have seen the light of day without funding.

There are many scenarios that can affect access to capital. How business-friendly is the economy? Are investors and lenders bogged down with red tape? Are they optimistic about the prospects of yielding a profit? Might they be concerned about consumer purchasing power if it’s not rising? Or maybe regard the market as saturated in a given sector? Endless possibilities can influence the outlook of investors and lenders.

One scenario that can surely affect startups’ access to capital is a financial crisis. Despite the inspiring success stories I’ve mentioned above, there is evidence that shows that potential for startups to succeed in the US has not yet fully recovered to its former pre-crisis levels in terms of births and deaths of startups, job creation and, perhaps most importantly, commercial lending. Fast-forward to 2018, and you’ll find the business press making noise about an upcoming and potentially deeper recession. Gloomy headlines such as “another economic downturn is just a matter of time” and “monetary policy for the next recession” can be found in the Economist and the Financial Times. JPMorgan Chase has even put a date on when it expects the bad news: 2020.

If the recession of 2008 is any guide, we know that we can’t underestimate how connected the GCC markets are to the fortunes of Wall Street: the US market, as the world’s biggest and most important, had a direct impact on commodity markets globally, which in turn affected GCC financial markets and government revenues. So the question for us becomes: how will we cope if a new crisis befalls us? Can we prepare any contingencies to keep new startups connected to their lifeline? Crisis or not, a lot can be said about the ability of startups to address all sorts of challenges, including the problem of access to capital. Just ask the people behind Kickstarter and Indiegogo. Beyond that, the role of pro-business institutions like Bahrain’s Tamkeen will be key in helping startups to rise and, if the doomsayers are correct, survive the winter of another recession on Wall Street.

About the author

Mahmood Almahmood is a translator and editor at a national news service. Trained in the social sciences and the arts, he enjoys staying abreast of the business press and analyzing its trends.

5 years ago
PayTabs Holds a Mentorship Session for Bahrain’s Startups on the Eve of its 5th Anniversary
Mohab Events 0

PayTabs Holds a Mentorship Session for Bahrain’s Startups on the Eve of its 5th Anniversary

The road to glory is always tough. You get the roses at the end but initially the road is filled with thorns. The journey of PayTabs has been somewhat similar.  When we began in March 2014, we were confident that someday we would achieve our goals. Today, we stand here, all set to celebrate 5 years of operations in a few days.

Mentorship Program Begins

And to commemorate this special occasion, we, along with Flat6Labs, Bahrain’s leading Accelerator Program, organized an exclusive event for the budding startups of Bahrain. The motive of hosting a startup meet was to impart knowledge, advice, tips, and tricks under the aegis of mentors. To add a cherry on the cake, PayTabs’ success story was served as a live example for all the 60 startups that attended the event.

Here, at PayTabs, we know the importance of mentorship. When the foundation was laid in March 2014 with a corpus of $10,000, we were determined to make an impact in our industry. And we were able to do so because we received genuine guidance from experts. And today, after 5 glorious years, we have established our presence in 21 countries, with our dedicated offices in Saudi Arabia, Bahrain, UAE, Philippines and India.

Now we felt the need to do something for our startup community. So as a startup, we planned to host the startups over breakfast at the PayTabs’ headquarters. The event comprised of the following sessions – PayTabs’ journey from zero to hero, round table discussions, questions from the participants, and a brief mentorship program on the right and wrong startup practices. The participants gained knowledge necessary to operate a startup in the right manner.

Bahrain – The City of Startups

The startup meet was a landmark event held in the land of Bahrain. Bahrain has a thriving ecosystem of around 75 startups, striving to make a mark in the field of innovation and technology. These startups have the support of over 34 accelerators, incubators, co-working spaces, and other institutions.

PayTabs is a prodigy of Bahrain’s startup culture. Once, we had an idea and a strong will to succeed. Today, we have the skills, resources, ambition, and vision. But it’s not just about us, it’s about everyone who dreams of spearheading a revolution in the society. And there’s no better way to do it than to found a startup. Isn’t that so?

5 years ago
How Digital Payments Can Ensure Online Business Success
Mohab Ecommerce 0

How Digital Payments Can Ensure Online Business Success

The modern business ecosystem today, is fast changing and as a business owner, you must adapt to survive these changes. One of the most phenomenal change, is the influence of the online market. If your business is not leveraging the growing internet market, you are missing out big time. Now, to survive in the highly competitive online market, you must provide a seamless shopping experience. One way of doing this is implementing a system which allows you to take payments online. A digital payment option helps unlock your business potential in various ways.

This article highlights how an efficient digital payment system, can ensure the success of your online business. Keep reading to know more.

  1. Providing a Fast and Convenient Payment Method

Online shoppers are infamous for their short attention span and their want for instant gratification. What this means, is that you must provide what they need, there and then. After a shopper adds items to their cart, the last thing you want is hitches in the payment process.

While most e-commerce websites promise easy payment, this does not reflect on the choice of payment options they offer. With digital payments, you can now provide a seamless shopping experience which in turn, leads to customer loyalty, fewer abandoned carts, increased sales conversion, and better ROI.

  1. Expanded Customer Base

Most e-commerce websites started out with only credit and debit card, as payment options. But things have now changed and if you do not adapt, you risk of being swept aside in this volatile market landscape. Digital payments allow more customers to complete the purchase journey on your online store.

You have an opportunity to expand your customer base which is the dream of every entrepreneur. By offering multiple payment options, you improve the shopping experience leading to increased sales, high ROI, customer loyalty, and brand recognition.

  1. Serve Various Geographical Markets

The best digital payment systems provide multi-site and multi-currency capabilities. It is now possible to target different geographical markets without the complexities of currency conversion. The idea of a global village has come to pass, and you should implement the best payment system to ensure you leverage this internationalization of commerce.

  1. Minimize or Eliminate Fraud

One of the greatest concerns in the online market ecosystem is safety when making payments. Shoppers must provide sensitive data, to complete payment and when such data falls in the wrong hands, many things can go wrong. This is where digital payments come in handy. The best payment gateway process entails performing card related encryption, authentication, and verification. Through such foolproof security measures, identity theft and fraud can be prevented.

If you have not integrated a digital payment system in your e-commerce store, you need to consider the risks for your business and your customers. Now that online shoppers appreciate the risk of online payments, they only use stores which guarantee the safest shopping experience. It is time to explore available payment gateways and purchase the best for your online store, to provide a safe and seamless shopping experience to the customer.

  1. Increase Profitability

One of the main objectives for every business owner, is to make a profit. In the e-commerce landscape, the stiff competition can reduce profitability and you must think outside the box to maintain the flow of the customers. This is where a digital payment solution comes in handy.

If you can accept multiple credit cards, mobile money, and other digital payment options, you will make customers happy which in turn leads to increased sales and profitability.  Potential customers will find it easy to complete orders which will, in turn, improve your brand’s reputation.

  1. Excellent Customer Satisfaction Levels

One of the major points of concern for online shoppers is the lack of a flexible payment option. It is a major reason many businesses rank poorly in terms of customer satisfaction levels. To overcome this challenge, you need to adopt digital payments.

It is an easy way of keeping your customers happy which leads to high customer ratings. Now that most shoppers look for business rating before making a purchase, you need to implement a seamless shopping experience by allowing flexible digital payments.

There is no gainsaying, the importance of an efficient payment gateway solution allows for seamless digital payments. It is an effective technique to keep your customers happy, increase your customer base, enhance safety security, cut the cost of accepting payments, and increase ROI.

6 years ago
PayTabs Wins Best Global Online Payments Solution of the year
Mohab Events 0

PayTabs Wins Best Global Online Payments Solution of the year

Every once in a while there comes a brand that disrupts the old way of working and replaces drudgery with excitement. Most entrepreneurs behind such brands have been told that their ideas are implausible. And yet, here they are, not only revolutionizing our lives but also empowering businesses, generating jobs, skilling workforce and changing perceptions. Such brands were recognized and awarded at the World Payment Congress on 14th February 2018.

The World Payment Congress recognizes players in the fintech industry who are working to create the next level of possibilities in payments. Globally, 35% internet users buy online from outside their home country. The cross-border market value is expected to surge to 994B in 2020. With a 27% YoY growth in eCommerce, India offers huge profits and potential opportunities to players worldwide.

For entrepreneurs who are looking to sell outside India, having a single payment interface across countries and currencies was a must. It had to be easy to use for merchants and hence a lot depended upon the global appeal of a clean and easy to use UX. Besides, changing times required the latest and most secure way to conduct transactions. All these requirements pushed PayTabs to create a new system that could change the way transactions were conducted internationally, especially by Small Medium Enterprises (SMEs).

Keeping their focus on SMEs proved to be a game changing strategy for PayTabs. They leveled the playing field between larger enterprises and SMEs thus creating a Blue Ocean for themselves and their customers. In addition to developing features that were in clear demand, PayTabs also understood several latent needs that existed in the market. They allow users to create and send online invoices, use API plugins to integrate with your website and even create an online store. They also allow instant global activation and don’t require an on ground local establishment.

PayTabs agility is demonstrated by the fact that they are quick to recognize local payment preferences and adapt their system to mimic these effectively. This ensures that people don’t have to step out of their comfort zone to use PayTabs. This also became a governing factor on why merchants adopted PayTabs with ease.

On receiving the award, PayTabs CEO Abdulaziz Al Jouf said, “At Paytabs, we are honored to accept the Best Global Online Payments Solution of the year award. Coming from World Payment Congress, this prestigious award is a recognition of the hard work from the entire team, without whom we couldn’t have grown to where we are today. We are thankful to our customers who’ve walked with us through the years, put their trust in our brand. We would also extend our gratitude to all our partners who made it possible for us to extend this solution to 17 countries. We look forward to making PayTabs a brand that people can use to build their businesses in the coming years.”

For PayTabs, the award is yet another feather in our cap. It validates our efforts in providing seamless B2B solutions in multiple currencies across multiple markets. It gives PayTabs added credibility as a service provider. If you would like to take your business to a global audience, do check this out to see how PayTabs can help you.

6 years ago