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Subscription Economy

In traditional form of businesses, the perpetual/ownership model was popular. Businesses earned profit through one time payment which was significantly high. There wasn’t any focus to deliver the value post sales.

Consequently, the customers weren’t motivated to renew the maintenance which led to high churn. That’s when the business model shifted from ownership to subscription economy.

In subscription world, customer is the real king and has multiple options. Hence, businesses are forced to deliver the stream of value to retain customers. The initial costs revenue are comparatively low but Lifetime Value (LTV) is high.

Success of a recurring business depends on the balanced focus between customer acquisition and customer retention. That’s why Customer Success play a vital role in subscription economy.

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