What is "Subscription Model" meaning?

The subscription model is a business term that describes a model in which customers pay a recurring fee to access a product or service, creating long-term, predictable revenue streams.

Example

"By switching to a subscription model, the company can rely on steady monthly revenue from its software-as-a-service (SaaS) product."

How is "Subscription Model" used in business?

In business, the subscription model is used by companies to ensure consistent cash flow. It’s commonly used in industries such as software, media, and e-commerce, where users pay regularly for continuous access.

Pro Tip

Consider offering tiered subscription options to appeal to a wider audience while increasing revenue. Be mindful of customer retention to sustain long-term growth.

Related Terms

Revenue Model, SaaS, Freemium, Customer Retention