subscription metrics

Before the advent of subscription companies, customers bought goods outright, and businesses just needed to be nice to the customer before the sale. 

Over the past decade, more and more businesses have turned to subscription models as a way to create sustainable, predictable, long-term revenue streams. Subscription businesses offer customers access to physical and digital products and services on a recurring basis, providing convenience, flexibility, and value.

ūüĒ• Why are subscriptions so important?
Apart from the enhanced customer experience, customers want personalized delivery, instant access and lifetime value, which definitely drive the success of subscription models.

The subscription economy ‚Äúhas grown by more than 100% a year, increasing from $57 million in sales in 2011 to $2.6 billion in 2016‚ÄĚ (stats courtesy of Stanford‚Äôs Graduate School of Business).

From streaming services to meal kits, subscription business model examples can be found in nearly every industry, and businesses are continually experimenting with new models to improve customer acquisition and customer retention initiatives, each new wave of success delivering a direct boost to their monthly recurring revenue, customer lifetime value, and other crucial metrics.

In this article, we’ll share some of our favourite subscription model examples across 5 main categories, which we’ve covered in more detail in our more detailed guide to the subscription business model.

 

Subscription boxes are among the most common examples of subscription business, especially for physical products. Usually, these involve regular deliveries of goods tailored to a subscriber’s interests in a particular area, such as meals and drinks, books, or practical products. Additionally, there may be the option to purchase one-time products alongside the standard subscription box.

Business example: HelloFresh

HelloFresh is a great example of the subscription box concept applied to a food service subscription model. Their boxes contained pre-portioned ingredients and step by-step recipes, making it easier and quicker for customers to cook meals at home. It’s a smart concept that has risen in popularity due to shifting consumer preferences towards healthier, sustainable, and convenient eating options.

The subscription model works on a weekly basis, with subscribers choosing the number of meals and servings they want every week. Subscribers can choose from a variety of meal plans, including meat and veg, vegan and vegetarian, and family-friendly options. The subscription pricing varies depending on whether you choose standard meals or premium options. One-time purchases like bottles of wine are also available, charged separately to the recurring payments. The food is then delivered in a refrigerated box to ensure freshness.

HelloFresh makes cooking easy and convenient, eliminating the need for grocery shopping and meal planning. Plus, through offering a variety of meal plans and recipes, HelloFresh encourage customers to try new foods and experiment with different flavors, catering to the desire for novelty and variety in food choices. The service has become popular among busy individuals and families who want to eat healthy, home-cooked meals without the hassle of shopping and planning.

Products in this category often run out frequently and often thrive off strong customer relationships forged over years of loyalty. Think about it – you probably already have your favorite brands for these products, and if, for example, your preferred toilet paper or hand soap isn’t available at the store, it can be a major disappointment.

Subscription services supplying these items are attractive because they ensure that the products always arrive on time and without worry. Retailers may already stock similar products, but the consistency of a subscription service in price and availability makes it a lot more attractive for potential customers.

Business example: Smol

Smol is a household cleaning product subscription service that offers a unique and eco-friendly solution for customers. Smol’s detergent capsules are designed to be compact, lightweight, and effective, with a formula that is free from harsh chemicals and is kind to both skin and the environment. Customers can sign up for a subscription service that delivers the laundry capsules to their door every few weeks, with the quantity adjusted over time based on their self-reported usage patterns – great for Smol, who are then guaranteed a more predictable revenue stream.

🔥 Top Tip
Top tip: Can you think of a data point you can get subscribers self-reporting? Getting them to provide feedback proactively which you can implement as you go will save you the hassle of having to run a whole new market research project once it's too late.

Smol’s subscription model ensures that customers always have enough laundry capsules on hand, without the need to constantly purchase new products. Additionally, the company’s focus on sustainability and eco-friendliness has resonated with consumers who are looking for ways to reduce their environmental impact. Through offering a seamless and eco-friendly solution for laundry needs, Smol has established itself as a top contender in its niche – an excellent example within this category of subscription models.

In a subscription context, a system refers to a subscription model normally focused around a core physical product that requires refills available through subscription only. Dollar Shave Club is a classic example, but toothbrush companies are also a great example of a niche that’s embracing this model, having customers pay for the toothbrush handle and then have to subscribe to their refills for a monthly subscription fee.

Business example: Quip

Quip is a toothbrush company that offers a unique subscription model for its products. Quip’s toothbrushes are sleek, compact, and easy to use, and designed with soft bristles and a timed vibration feature to ensure efficient and effective brushing.

Subscribers can choose from various colors and models, including electric and manual toothbrushes, and sign up for a subscription service that replenishes their supply of brush heads and batteries every quarter. Quip’s subscription model ensures that customers always have fresh brush heads and batteries on hand, without the hassle of having to remember to purchase them separately.

They also also offer dental hygiene products, such as toothpaste and floss, that can be purchased on a one-time basis, rather than for a monthly fee. With its innovative design and convenient subscription model, Quip has become a leading choice for people looking to streamline their oral health routine, and is well known as a world-class health and wellness subscription.

Collectibles, passions, and hobbies-related subscription businesses cater for communities around the world with a shared obsession for the same niche interests, from science fiction movies to long-distance running.

Business example: Loot Crate

Loot Crate is a well-known subscription business that delivers a monthly box of pop culture-related items straight to the doors of fans around the world. Their business model plays on the excitement of unboxing a crate filled with an array of themed collectibles, from T-shirts and figurines to posters and other must-have memorabilia from franchises including Star Wars, Marvel, and Harry Potter. Their business model involves customers choosing from various plans and paying a monthly fee, ensuring they have a regular supply of new and exciting items delivered right to their door every month.

Loot Crate’s unique subscription model offers an exciting and convenient way for customers to collect and experience their favorite pop culture franchises. The surprise element of each box adds a sense of anticipation and delight, making it a thrilling experience every month. The service has become increasingly popular among fans who value the convenience and excitement of having the latest and greatest pop culture collectibles delivered to their doorstep. By tapping into their market and providing a unique and enjoyable offering, Loot Crate has earned itself a reputation itself as a powerhouse within its niche.

Membership businesses models, sometimes referred to as ‘access subscriptions’, offer opportunities for individuals to gain skills, explore a hobby, and access exclusive content. Often, these business models involve an element of community engagement involved too, whether it’s having dialogue with other members or competing against them in internal challenges. The power of community engagement to help reduce customer acquisition costs has made the membership model an increasingly important one within the wider subscription economy.

Business example: NatureBox

NatureBox is a successful online food service subscription founded with a membership model at its core. The snacks are made with high-quality ingredients and are free from artificial preservatives, colors, and flavors.

NatureBox allows customers to enjoy their beloved snacks for members-only prices. It works by offering a membership subscription to its customers that costs $30 a year (no monthly fee here!). The membership benefits include discounts and special prices for the subscribers, with up to 40% discount on every order, forever. NatureBox also provides its subscribers with a monthly store credit of $5, which amounts to $60 a year.

Their policy is that the first 30 days of membership are free of charge and you can quit anytime – a very successful freemium tactic for building strong customer relationships. Through an innovative application of their subscription model, NatureBox ensures that customers have a regular supply of healthy snacks on hand, without needing to constantly search for new and nutritious options.

These are just a handful of examples of subscription concepts, selected across a wide range of product niches. The point is that there’s an almost unlimited amount of ideas you could apply the business model to, and all it takes is your imagination.

Starting subscription companies becomes much easier with the right tools, whether you’re selling a physical or digital product or service. Subbly’s no-code, all-in-one platform gives you access to 100+ features to help you launch, run, and scale your own subscription business, without any third-party plugins!

Now, cheers to your next subscription business venture – your first 2 weeks are on us when you register for Subbly today!

By Stefan
Founder & CEO of Subbly