Benefits of subscription-based model

A subscription-based business model provides a predictable revenue stream, retains customers, and simplifies business processes.

Many businesses collect monthly or annual up-front fees from their customers for work that has yet to be performed. As this subscription model has been incorporated into more businesses and especially with SaaS (Software as a Service) offerings, it has been found to be the ideal solution where continuous service is anticipated. Example of such services out there are Salesforce, Netflix, Spotify and PlanMill, to name just a few.

Here are some key benefits for opting such a model:


A subscription model simplifies your business processes, which makes it very easy for both the business and for customers. For customers, this model is especially convenient, because they don’t have to make a repeated purchase every month. And when your financial transactions are spread out over an established timeline, it lowers the price barrier for other potential customers to purchase the product. The smaller payments makes your product more appealing and allow your consumers to immediately take advantage of the benefits of your product or services. This broadens your business’ client base.

Offers predictability

For businesses, the value of this model is the ability to predict revenue through recurring sales. When business don’t have to solicit any orders from existing customers it means a smoother flow of revenue. Your company knows exactly down to the penny how much income that sale will generate in each billing cycle and throughout customer lifecycle. Therefore, the model improves your company cash flow and assists you in long-term financial planning.

Encourages customers retention

This model is appealing to your customers, because it allows them to easily scale up or down without worrying about additional paperwork and lengthy processes. All this leads to satisfied customers who will likely return for future purchases, which will improve relationship between client and your company. Therefore, subscription model is excellent way to retain your customers by demonstrating that your business is open and flexible to their needs.

To sum up

The benefits of subscription model to business is manifold. A subscription-based model retains customers, offers greater convenience and flexibility for customer, and predictable revenue stream for business. For more on how PlanMill can help your business move to subscription-based pricing model, please contact PlanMill today.

Check also article: Choosing the right billing model for your service business


PlanMill Ltd. is a leading provider of user-friendly web-based CRM, PROJECT and ERP Cloud solutions designed for the service business. We enable organizations to streamline business processes, improve control of their customers, personnel, projects and finance – while enhancing productivity and profitability.

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