Download pdf
The Mechanism and Components of Subscriptions in the Business Model
- 1 Department of Economics, Binghamton University, Vestal,13850, United State
- 2 Industrial and Commercial Bank of China, Beijing, 102200, China
- 3 School of Transportation, Southeast University, Nanjing, 211102, China
- 4 Indiana University Bloomington, Bloomington, Indiana, 47401, United States
- 5 Ulinkcollege, Guangzhou, 511466, China
* Author to whom correspondence should be addressed.
Abstract
The subscription business model transforms the traditional way products and services are consumed since it enables generating ongoing revenues, building loyal customer bases, and adapting to shifting customer tastes. This paper focuses on several key mechanisms and components of subscription business models to illustrate how they can help companies maintain Customer Loyalty, achieve Customer Lifetime Value, and achieve Annual and/ or Monthly Recurring Revenue in the face of complex business competition. For further innovation and adaptation of the subscription business model, there are opportunities to further study the role of digital tools in service delivery, customer participation, and revenue growth.
Keywords
Subscription Business Model, Mechanisms, Components, Recurring Revenue
[1]. Ahuja, K. (2022, October 11). The ultimate guide to customer retention for subscription products. Inc42 Media. https://inc42.com/resources/the-ultimate-guide-to-customer-retention-for-subscription products/#:~:text=Why%20Is%20Customer%20Retention%20Important,subscriber%20into%20a%20repeat%20customer.
[2]. A study of American mass ebook subscriptions. (n.d.). Publishing science. http://cbkx.whu.edu.cn/jwk3/cbkx/CN/Y2015/V23/I3/89
[3]. Srivastava, P. (2022, February 12). History, present, and future of the subscription business model. StartupTalky. https://startuptalky.com/subscription-business-model/
[4]. CB Insights. (2021, June 29). 7 surprising industries turning to subscription business models. CB Insights Research. https://www.cbinsights.com/research/report/subscription-business-model-industries/#:~:text=For%20decades%2C%20one%20of%20the,or%20even%20millions%20%E2%80%94%20of%20customers.
[5]. Tzuo, T., & Weisert, G. (2018). Subscribed: Why the Subscription Model Will Be Your Company's Future-and What to Do About It. Currency.
[6]. Freed et al. (2022). Implications of the Subscription Economy. https://dx.doi.org/10.2139/ssrn.3998519
[7]. Tarver, E. (2022). Subscription business model defined, how it works, examples. Investopedia. https://www.investopedia.com/ask/answers/042715/how-do-subscription-business-models-work.asp
[8]. Arioli, V., Sala, R., Pirola, F., & Pezzotta, G. (2022). Subscription Business Models in the Manufacturing Field: Evidence from a Case Study. Advances in Production Management Systems. Smart Manufacturing and Logistics Systems: Turning Ideas into Action, 359–366. https://doi.org/10.1007/978-3-031-16411-8_42
[9]. Schuh, G., Wenger, L., Stich, V., Hicking, J., & Gailus, J. (2020). Outcome economy: subscription business models in machinery and plant engineering. Procedia Cirp, 93, 599-604. https://doi.org/10.1016/j.procir.2020.04.146
[10]. Kim, D. Y., Von Cieminski, G., & Romero, D. (Eds.). (2022). Advances in Production Management Systems. Smart Manufacturing and Logistics Systems: Turning Ideas into Action: IFIP WG 5.7 International Conference, APMS 2022, Gyeongju, South Korea, September 25–29, 2022, Proceedings, Part II (Vol. 664). Springer Nature Switzerland. https://doi.org/10.1007/978-3-031-16411-8
[11]. Qin, J., Liu, Y., & Grosvenor, R. (2016). A Categorical Framework of Manufacturing for Industry 4.0 and Beyond. Procedia CIRP, 52, 173–178. https://doi.org/10.1016/j.procir.2016.08.005
[12]. Günther Schuh, Lucas Wenger, Volker Stich, Jan Hicking, Jonas Gailus. (2020). Outcome Economy: Subscription Business Models in Machinery and Plant Engineering. https://www.sciencedirect.com/science/article/pii/S2212827120310167
[13]. Schaeffer E. (2017). Industry X.0: Realising digital value in industrial sectors. London, Müchnchen, Germany: Kogan Page; Redline.
[14]. Moser B, Frank J, Faulhaber M. (2019). Digital Business Models in the Manufacturing Industry: Status quo of the Industry – from Digitized Processes to Digital Business Models. Aachen.
Cite this article
Du,J.;Guo,M.;Feng,T.;Liang,G.;Yue,B. (2024). The Mechanism and Components of Subscriptions in the Business Model. Advances in Economics, Management and Political Sciences,101,1-6.
Data availability
The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.
Disclaimer/Publisher's Note
The statements, opinions and data contained in all publications are solely those of the individual author(s) and contributor(s) and not of EWA Publishing and/or the editor(s). EWA Publishing and/or the editor(s) disclaim responsibility for any injury to people or property resulting from any ideas, methods, instructions or products referred to in the content.
About volume
Volume title: Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
© 2024 by the author(s). Licensee EWA Publishing, Oxford, UK. This article is an open access article distributed under the terms and
conditions of the Creative Commons Attribution (CC BY) license. Authors who
publish this series agree to the following terms:
1. Authors retain copyright and grant the series right of first publication with the work simultaneously licensed under a Creative Commons
Attribution License that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this
series.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the series's published
version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial
publication in this series.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and
during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See
Open access policy for details).