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BizReport : Ecommerce : August 31, 2016


Expert: How to determine if a subscription service is good business

With more and more consumers attaching budget dollars to subscription services, businesses are taking note. But, according to one expert, subscription services may not be a good bet for all businesses. Here's how to determine if it's right for yours.

by Kristina Knight

Kristina: What is the draw for subscription services?

Louis-Vincent LeDoux, Director of Customer Experience, RecurRex: The convenience of setting and forgetting recurring purchases has to be one of the greatest advantages for consumers. Also, in most cases, the commitment of subscribing will in return yield discounts, special offers and gifts. And talking about gifts, those who enjoy receiving them should try subscribing to a few subscription boxes. Usually on a monthly basis, these are filled with surprises that can be tailored to one's preferences, making that day of the month a special experience!

On the business side, my answer to the previous questions pretty much covers it; improved cash flow and inventory management, better revenue forecast and greater customer loyalty.

Kristina: How can a business know if a subscription service is a good opportunity for them?

Louis-Vincent: The first thing to analyze is whether their existing clients are repeatedly buying their products/services or not. Then they can check if the orders are rather regular, or if they happen sporadically with no easily defined patterns. They can discuss the subscriptions idea with a few of their best clients to see what value it could bring to them if they chose to offer subscriptions. They can also run tests with some of them.

At RecurRex, we understand that businesses, especially startups, want to validate their ideas without investing so much in them. Our pricing model allows just that, because it only has a minimal one-time fixed fee, while the rest is a variable monthly fee per customer of the business. Therefore, it's very cheap to launch, and the fees only go up as your business is scaling. It's also a great time and money economy to opt for RecurRex rather than developing their own subscription software.

Tags: ecommerce, ecommerce trends, RecurRex, subscription ecommerce, subscription service trends










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