Growing a Subscription Model Business

by Justin Grensing, Esq., MBA


content marketing, content management, newsjacking, social media, digital marketing, SEO, online marketingWith an up and down history dating back to the 1960s, the software-as-a-service or SaaS model has become the norm in tech-centered industries over the last couple of decades. With a SaaS model, providers of various applications or data storage capabilities allow end-users to remotely access the application or data. This is in contrast to models many of us were familiar with in the 1990s and 2000s where you would purchase an operating system software and install it via CD on a personal computer, for example.

In an article for Entrepreneur, Thomas Smale writes that the SaaS model has moved further and further toward a subscription model and suggests several subscription model-oriented growth strategies. These aren’t strategies only for very large, enterprise organizations. Even the smallest businesses, or solopreneurs, can leverage the subscription model to build sales.

Keep an Eye on Your Competition; Update Your Pricing Model Often

Smale notes that pricing strategy is important in the subscription business and recommends keeping an eye on competition and updating pricing appropriately. We would caution, however, against updating your pricing model too often. A better piece of advice might be to “revisit your pricing model often.” Changing pricing models too frequently can be extremely off-putting to customers, and if you have B2B customers, you need to be cognizant of the fact that they need predictable pricing for budgeting purposes.

Build a Stronger Connection with Your Customers

In contrast to an ecommerce site, subscription-based sites require a deeper level of customer engagement. Standard retail businesses certainly love repeat business. But subscription-based businesses require it, and finding ways to develop strong connections with customers is crucial. Since these customers are somewhat of a captive audience, subscription-based businesses can take advantage of the opportunity to connect with, and solicit input and feedback from, their subscribers. But don’t just solicit—listen and learn!

Gain a Better Understanding of Your Financial Metrics

The financial metrics particularly important for subscription businesses are those that take into account the revenue model. These include churn—a measure of those who discontinue your subscription, lifetime value (LTV)—the amount of revenue you can expect to gain from a customer over the course of the relationship with that customer, and monthly recurring revenue (MRR)—the income the company can reliably expect every 30 days.

Create Valuable Content

We’ve heard it in many contexts, and it continues to ring true: content is king. In the Digital Age, content is what keeps people coming back to your site and is a crucial part of the value proposition. This is only true, though, if this information is original, unique—and highly valued by your target audience.

Develop a Referral Service

“According to Annex Cloud, referral marketing generates three to five times higher conversion rates than any other channel,” writes Smale. He adds that word-of-mouth is important for subscription businesses and recommends starting with one’s personal and professional network.


New technologies and market conditions have always given rise to new business opportunities. And as these opportunities mature, they become essential features of any business wishing to stay competitive in a given field. It may be that aptitude in SaaS and subscription models become essential for the online business world in the not-so-distant future. What subscription models might help you to expand your business, and your market?


About Us

Strategic Communications, LLC, works with B2B clients to help them achieve their goals through effective content marketing and management with both internal and external audiences. We work with clients to plan, create and publish high-quality, unique content. Whether on- or offline, or both, we’ll help you achieve desired results.

(Strategic Communications is certified as a Woman-Owned Business Enterprise through the Wisconsin Department of Administration.)

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