Can Your Product Survive in a Subscription Economy? (And How to Set Up Recurring Payments)

A study from Juniper Research has found that the global market value of the subscription economy will grow to $275 billion (€242.6bn) in 2022, up from $224 billion in 2021.

That’s a big ol’ pie – and there’s no reason you can’t grab a slice.

After evaluating 10 key subscription-based markets, Juniper then identified the following verticals as generating the highest revenue in 2022:

Physical goods
Digital video
Digital music

And you can sell all three with Convertri.

So if you fancy yourself as the next Dollar Shave Club, Netflix or Spotify, we’ve got you covered – and if you only want to be a fraction as big as those monsters, it’ll be even easier to set yourself up as a subscription-based business.

Why are subscriptions booming?

Juniper Research’s report, Subscription Economy: Future Strategies & Market Forecasts 2022-2026, found that the huge increase in user demand for reliable, recurring deliveries of items and digital goods was down to a couple of factors:

The pandemic. Covid-19 means that many of us, for at least some length of time, couldn’t leave our houses. And even when we did, more businesses were shut, experiencing shortages, and/or implenenting social distancing measures that meant it was harder to get what we want. Subscription services meant we could have our little luxuries, delivered right through our letterbox.
Better automation. Developments in subscription service software and technology meant it’s easier than ever for subscription box services to set up and start serving customers.

From Masterclass to Graze, Birchbox to Beer52, subscription boxes and services have become all the rage. But there has been some negative press around previously pay-once software moving to a subscription plan – looking at you, Microsoft Word – that has people disgruntled with the subscription model.

So, what does this mean for you?

Moving your business to a subscription model

It should be obvious that not every business is suited to a subscription model, at least at first glance – will writing, for instance, or teapots (there are only so many you can fit inside a home).

The kinds of business most naturally suited to subscription models are ongoing services, media series or consumable products.

Here are some examples:

Coaching or counselling services.
Podcasts, TV shows, or newsletter series.
Food, drink or refill products.

In fact, one of the most successful subscription models is the razor and blades model, pioneered by King Camp Gillette. In 1901, he patented a disposable razor that would be “safer” and “more convenient” than traditional razors you had to sharpen every so often. Gillette realised that big profits could be had by selling inexpensive razor handles with disposable blades. Now, subscription models such as Dollar Shave Club profit from this model by eliminating the need to remember to buy refills.

Razors n’ blades is a great subscription model if you have a good product and want to continue building loyalty and recurring revenue by selling an intial product at a relatively low price, followed by consumables. Any product that needs periodic refills or replacement parts will fit: from toothbrushes and their heads to inkjet printers and their cartridges, to coffee machines and their pods.

But even if your business isn’t obviously suited to a subscription model, there may be a way you can add a subscription on the back-end: for example, if you do web design, how about a monthly hosting fee or maintenance subscription? Or for a cyber security company, a certain number of basic checks performed every month for a lower cost than a full service?

How to set up recurring payments in Convertri

No matter the type of product or service you offer, you can set up recurring subscriptions in Convertri.

In the Dashboard, click on Cart on the upper right corner, then select Products from the left-hand menu.
Click New Product to create a new product, or click on an existing product to edit it.
Select the ‘Price’ option on the left hand side, and then check the box labelled ‘This product is recurring’.
Enter the details of the amount, billing cycle and frequency of the recurring payment. You can also set one or two free or paid trials here by checking the ‘offer trial’ box.
Click Create.

Now, when a customer checks out on your page, their payment details will be stored and billed according to these settings.

NOTE: If you decide in the future that you want new customers to pay more for your product, but you want old users to stay at their old price, you can do this. Make the price change in the Product modal, click Save and republish affected pages. Convertri creates separate subscriptions for the two, so this will cause future users to pay the higher price, but the old users will stay on the amount they were before.