Two months after the pandemic hit, ecommerce broke the internet. “More money was spent online in the US between April and May than the last 12 Cyber Mondays combined," discovered a MasterCard study.
Customers haven’t looked back. “The global market for mobile commerce [was estimated] at US$1.9 trillion in the year 2020,” and is “projected to reach US$6.6 trillion by 2027,” another study found.
One ecommerce business model that’s been on the rise is subscription – and not just for B2C.
“Subscription for B2B software and services are set to reach $344.3 million by 2024, with a 24% CAGR [compound annual growth rate],” reports AppDirect.
If you decide that B2B subscriptions are for you, jump in now. We’re in the sweet spot, where people feel comfortable with subscriptions, and they haven’t oversaturated the market, yet. It’s a great opportunity to diversify your revenue sources, increase customer loyalty, and maybe even set the standard for your industry.
Efficient B2B Subscription Selling Starts with a Strong Ecommerce Platform
Subscription plans are a great way for B2B companies to:
- Improve customer lifetime value
- Reduce customer effort (they take action once, and get everything they need on a recurring basis)
- Increase sales time on cross-sell, upsell, and retention – which have been known to be significantly more profitable than initial sales
Ecommerce platforms elevate subscription plans because they:
- Provide access to marketing data, so you can customize offers
- Simplify billing profile management, so customers can be automatically contacted before their companies’ credit cards expire
- Facilitate integration with tools that elevate customers’ experiences
Especially if you use headless commerce.
How Headless Commerce Makes a Difference for B2B Subscriptions
As we previously shared, headless commerce separates the front-end layout and design from the backend functionality. This gives you flexibility in creating customer experiences that get them coming back.
Some of the ways headless commerce helps subscription plans include:
- Experimentation with new offers
- Native integration with subscription features, data, and complementary partners
- No more waiting for IT to develop a brand new platform or interface from scratch
- You have the control and are able to move at the pace your strategy and customers need
This control matters. Selling subscriptions is different from one-off sales. Customers get more choices, and marketing gets more testing opportunities. With headless commerce, changing design, copy, and even pricing is quick and easy, and requires no technical knowledge.
Sounds good? Let’s talk about what subscription plans you can offer.
5 of the Best Subscription Types for B2B Companies
The business world is filled with opportunities to create differentiating experiences, especially if you’re in an industry that doesn’t emphasize experiences. To stand out:
- Consider the business needs you’re serving. Can you provide better service, meet unmet needs or reach new customers through a recurring or subscription product?
- Build a profile of your existing customers and the customers you would like to acquire and nurture
- Evaluate current performance, decide on trackable goals and KPIs and establish internal benchmarks for progress and growth. Keep in mind that the KPIs for a subscription selling model differ from those of a regular ecommerce business
Next up, choose one (or more) of the following subscription types:
Digital Media & Content
We all publish content for free as part of our marketing efforts, yet you could gate premium content behind a paywall. What’s the kind of content your customers and prospects will pay for? Here are a couple ideas:
- Industry news coverage and in-depth research reports, which will help your audience filter out the noise. You could even analyze how non-industry trends might impact them, to give them an unfair advantage in the market.
- Industry movies or video series. These could be historic documentaries, in depth factory tours, or a series covering fun and little known tidbits only your audience cares about.
- Training libraries that will set them up for success at work, including modules on how to succeed in current roles and lessons that upskill them for career growth.
- Premium Support Content. Go beyond simple product tutorials. Show them behind the scenes secrets, and share fellow customers’ most creative product usages.
If you sell parts or supplies that customers need on a regular basis - like construction materials - this type of subscription helps customers ensure they’re delivered on a regular, consistent basis. Pre-booked recurring deliveries and services are a win-win. It’s great for your cash flow, increases retention chances, and saves your customers the hassle of:
- Remembering to reorder
- Getting into supplier selection and contract negotiations again
Plus, there are many ways you can improve your customers’ lives (and your bottom line) with this business model, including:
- Serving a construction company that constantly needs brick and mortar? Let them buy it a year in advance, schedule deliveries, and save on the bulk order
- Provide agronomic equipment to high growth companies? Offer regular training or maintenance visits
Need more ideas? We’ve got you:
- Offer a subscription to products that run out or wear out, like machine parts
- Bundle products with complimentary products or services
- Provide discovery items – say, free samples of your premium products – for even more upsell and cross-sell opportunities
According to Costco’s 2020 annual report, “the company surpassed 100 million members worldwide, contributing to membership revenue of $3.54 billion” out of a net income of “$4 billion, or $9.02 per diluted share.” Its “member renewal rate was 91% in the U.S. and Canada and 88% on a worldwide basis at the end of 2020,” added the report - a great example of retention rates that are possible when you give customers what they need.
Some of the ways it could work for B2B companies include:
- Providing discounts and special offers for members only. Promote the offers on social media – explaining they’re member only offers – to attract new paying members
- Offering premium access – 24/7 support, first refusal for top materials, voicing their opinion on product development as you go, or roundtables with company executives
- Special Pricing Tiers - Membership access can unlock access to special pricing levels. “Gold Customers” get an extra 5% off an order, etc. With a robust customer management solution, you can define the exact types or categories of products that should qualify for those discounts as part of the special pricing
- Shipping Discounts - Everyone is familiar with Amazon Prime, why not try the same concept? Your members get access to shipping upgrades for the same price they typically pay
Media Streaming Subscription
OK, sure, if you sell construction equipment you might not have 82 million people readily waiting to binge watch your latest episode. But you could offer the people you do have the one spot on the internet to indulge in that obscure passion no one around them really gets. Some of the content you could offer:
- Fiction movies or series about your industry
- Documentaries and vlogs that take viewers behind the scenes of professionals like them, or their customers
- Interviews with your customers’ customers and industry thought leaders
- Remote access to conferences, even when they get back to being IRL
No matter what you choose, remember what matters.
The Key to Successful B2B Subscription Selling Models
Deciding on a subscription business model requires a deep understanding of the continual need you set to fulfill. It has to be something customers need on a regular basis. Then, design the experience they’ll have once they’re subscribed, including:
- How will customers manage their own subscription?
- What will getting customer support look like? What training will be necessary for the internal customer support team?
- Are you comfortable with your payment and billing management capabilities?
- What will you do to continually engage them throughout the subscription?
- How will you verify customers are satisfied with the subscription?
The more focused you are on their success, the more they’ll continue generating that recurring revenue for you. Maybe they’ll even upsell to a bigger plan, and encourage their friends in other companies to do the same.
This article is brought to you in collaboration with Slatwall Commerce, a modern ecommerce platform that combines enterprise features with headless commerce flexibility, securely in the cloud. A complete ecommerce platform with open-source roots, Slatwall Commerce is available as a SaaS solution providing a full suite of tools and functionality for business and marketing teams while being developer-friendly.
Brad Gustavesen is CMO and partner of Slatwall Commerce, located in Worcester, Massachusetts. Brad is responsible for building awareness of the Slatwall Commerce platform as well as working directly with agency partners, technology partners, and other services in the ecommerce ecosystem. Brad’s experience as an ecommerce manager and developer gives him a unique perspective on building and creating successful ecommerce operations.