Why businesses are flocking to subscription-based models during economic uncertainty
As businesses continue to grapple with the uncertainty of the current economic climate, the rate at which they are monetising their offerings through subscription-based models continues to gather momentum – and its little surprise. Over the last 12 months we have seen significant devaluation of companies across multiple sectors.
Big tech companies like Meta, Alphabet, Amazon and Microsoft, haven’t been immune, with Q3 earnings reporting a combined loss of over $350bn in market cap value. In fact, according to the British Chamber of Commerce, 39% of businesses across the UK believe their profitability will reduce over the next 12 months.
During a period of uncertainty, businesses need to look at new ways to maximise revenue.
Monetising subscription-based services have seen significant momentum in the market. Take Mercedes Benz, for example. It recently announced that electric car users can now pay an annual subscription fee of £991 to enable their vehicle to reach 0-60 one second faster. With clear benefits like reliable recurring revenue, increased customer loyalty, and the ability to manage your financial forecast, heading into 2023, we will see a steady shift of businesses looking to further monetise their offerings through subscription-based models.
How integrated payments are charging the way for best-in-class customer experiences
In today’s digital economy, consumer behaviour has taken a significant shift towards the need for seamless shopping experiences across all channels. This level of expectation has subsequently translated to their expectation of service when it comes to payment choices too. The ability to offer customers the full range of payment options, whether in the store or online, has become a crucial aspect of the customer buying journey. For those merchants unable to give consumers their preferred method of payment, there is a danger that they will simply turn to a competitor. In the battle for market share, it is vital that businesses offer best-in-class, frictionless, multi-option payment services across every channel in which they operate. With higher expectations, merchants are increasingly turning to software like integrated payment service technology which enables the merchant to meet the needs of all customers and allow their customers to pay by any means, anywhere.
The need for total inclusion during economic uncertainty
Increased digitalisation, combined with current economic instability, means it is crucial that merchants and payment providers carefully consider how they reach those with limited access to digital payment methods. While the increase of digital payment use is inevitable, the continuation of cash for households will continue to be a significant part of their everyday spending. Therefore, businesses need to consider how they capture the spending habits of those consumers less connected to digital payment means.