How a B2B Subscription Model Can Skyrocket Your Customer Lifetime Value

Aumcore
  • Date Published
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The subscription model has been mostly used in the B2C sector. However, it’s now being increasingly applied in the B2B sector.

In today’s world, as a consumer, you’re more than likely to have a few subscriptions that you pay for every month. That could be a gym membership, pet food, or software programs that you use either for work or pleasure.

This subscription model has been mostly used for the B2C sector. However, it’s also being used now more often in the B2B sector. The rise of paid subscriptions has spiked by 40%, following the Corona pandemic.

What is a B2B subscription? A B2B subscription model is simply a subscription service that’s offered by one business to another.

Benefits of Having a B2B Subscription Model

There are many benefits to using the B2B subscription model when it comes to attracting your customers in 2023. Here are a few benefits to using this method of selling to your audience.

Reduce Your Customer’s Efforts

With a subscription in place, there’s less effort and workload for the customer. It means they can spend their time elsewhere, satisfied that they’re getting a good service from your business. Not only are you providing them with your product/service, but you’re also providing them with time to do other important work.

Increase Customer Loyalty

There’s nothing better than having customers who are loyal to your brand and business. With B2B subscriptions in place, you help increase the lifetime value that your customers provide to your business.

Decrease the Time and Resources Required to Close a Sale

With a subscription, there are less time and resources required to help secure and close a sale. When nurturing a lead, it can often take a lot of effort, time, and money to see the lead conversion process through to the end.

Examples of B2B Services That Businesses Can Offer

There are different B2B service examples that can be offered by your business to other businesses. These can be broken down into four different categories.

Software

Also known as Software-as-a-Service (SaaS), this growing industry has become the go-to business model when providing software. In fact, 80% of businesses are planning to make all their systems SaaS by 2025. That being said, it’s worthwhile offering software subscriptions to both businesses and customers in general.

Event Planning

In the world of business, corporate events are a regular occurrence. To assist businesses in planning and managing such events, event companies can step in to alleviate the burden. This service allows business owners to focus on what they do best while still addressing the social element of corporate events.

Training and Development

Upskilling a business’s workforce helps to ensure that its employees are up to date on the latest industry trends and ready to take on the competition. This can be anything from recapping the basics to seeking more specialized training programs that are relevant to their industry.

Freelance Services

While we like to think that businesses can handle it all, there are occasions when outsourcing excess work becomes necessary. This could be small-scale and one-off work or work that involves multiple areas of a business that require a ‘Plan B’ for certain situations, just in case.

Call Centers

Bigger businesses do not have the time to manage countless phone calls and address individual client complaints and queries. Call centers allow customers to reach out to a representative and receive the assistance they need.

Five Steps to Implementing a B2B Subscription Model

In order to implement the B2B subscription model for your business, there are a few steps you should follow.

1.  Decide on What Type of Subscription Model to Offer

With different subscription models available, it’s important to clarify the type of subscription you’re going to offer. For some, it might be a physical product, whereas for other businesses, it might be a digital product. Consider what you can offer as a business that won’t necessarily cost you anything to produce.

2.  Include Your Profit Margin in the Pricing of Your Model

When pricing the subscription, you want to offer the best value for money. At the same time, don’t neglect the need of your business to make a profit. Try to price your subscription model so that it both appeals to your customers and supports your business’s objectives.

3.  Acquire Customers Across Multiple Channels

When you’re reaching out to customers, be bold in advertising across multiple channels. Where possible, these subscriptions can be promoted across more than just one social media platform. It’s handy to know that your audience isn’t just going to be on one platform after all.

4.  Make Payments Easy to Make and Collect

With payments, making them easy to make by offering multiple payment getaways will add to the customer’s experience. It’ll make all the difference when securing your customers in the future.

5.  Nurture and Develop Your Customer Relationships

When you’re looking at how to engage B2B customers, it’s all about nurturing and developing relationships. Just because they’ve subscribed, doesn’t mean that your job ends there. You need to be willing to work on the relationship and to continue offering them the support and help they need to give them the best experiences.

The Pitfalls of B2B Subscription

There are some pitfalls that come with B2B subscriptions. To ensure you get the most out of this sales opportunity, there are a few things to consider.

Competition Is Growing

With subscription-based businesses popping up left and right, it’s important to be aware that you’re going up against a lot of competition. Some markets are more saturated than others, depending on the industry you’re going into. Setting yourself apart from the rest and being creative in your sales pitch is going to help you attract more customers.

High Cancellation Rates

With subscriptions, not everyone needs them all the time, which can lead to cancellations. While there’s a large subscription market, it doesn’t necessarily provide a regular source of revenue for every business. The turbulent element of this business model is that you’re going to have a rollercoaster of sales. One month might be great while the next two months might not be. In that sense, it can be quite unreliable.

A Constant Need to Provide New Value

While it can be great to acquire new customers through this subscription model, the reality is that consumers will get bored easily. That means that you’re going to have to constantly improve on what you’re already providing. This could, for example, be reducing your prices, or adding more content and features that make your subscription more worthwhile.


Natalie Redman is a content writer for Aumcore, a digital marketing agency in New York. Providing e-commerce video marketing for many brands and businesses, Aumcore helps optimize the user experience and improve lead conversions across all platforms.