What are the types of subscription models in B2B?

B2B subscription models allow companies to sell to customers on a recurring, automated basis—and popularity is on the rise.

In May 2020 alone, trial subscriptions jumped by 115% for business and professional services, and subscription revenues have consistently grown nearly five times faster than S&P 500 Industry benchmarks over the last decade.

In this blog post, we’ll discuss the benefits of subscription models and the types of subscription services that make the most sense for businesses.

Why are subscription services so popular?

B2B subscription models offer convenience and predictability that benefit companies and their customers alike. They generate predictable recurring revenue and help foster ongoing customer relationships. It's no surprise, then, that many businesses are seeking out subscription management solutions to capitalize on the growth opportunity.

Meanwhile, customers appreciate the ease and flexibility of “set it and forget it” payments. For many, paying for products or services in increments makes better business sense than paying a lump sum upfront.

There are several different types of subscription services and products. Chances are, there’s one that could benefit your business. Let’s explore a few options.

Six main B2B subscription models

1. Ecommerce subscriptions

Ecommerce subscriptions allow for recurring purchases of business products. Autoship subscriptions give customers a regular supply of the same products that are used consistently—think printer cartridges or coffee pods. By contrast, curated subscription boxes include a unique selection of products in each order, so they’re good for providing a rotating selection of office snacks or supplies, for instance.

2. Software-as-a-Service (SaaS) subscriptions

SaaS subscriptions are monthly or annual licensing models for software such as video conferencing solutions, customer relationship management tools, or sales performance management programs, to name just a few. These are often paid on a per-user basis.

3. Premium access or service models

Premium access or service models begin with a free subscription that includes basic functionality, which users can later upgrade to unlock premium paid features.

4. Usage-based subscription models

Usage-based subscription models leverage Internet of Things connectivity to track how much a customer uses a product or service and bills them accordingly on a recurring basis. Examples include data storage solutions and email marketing tools that bill based on the number of contacts.

5. Product-based subscriptions

Product-based subscriptions charge monthly or annual fees in exchange for the use of products. Many organizations pay for office furniture or electronics—such as employee laptops or desktop monitors—in this manner.

6. Service-based subscriptions

Service-based subscriptions offer product support on a recurring basis. This is typically either included with the purchase of a product—a warranty, for instance—or it may be offered as an upgrade by a sales representative.

See what’s possible with subscription management

When implemented strategically, a subscription business model can help you deliver an effortless buying experience for customers while streamlining billing and revenue.

For a real-life example, see how Edmunds, the leading online resource for auto information, cut subscription processing time from days to hours using Oracle Subscription Management, increasing both subscriptions and revenue in the process.

Thinking about adopting a subscription management solution yourself? We can help you get started.

Learn the essentials of B2B subscription models and see Oracle Subscription Management in action with the brief self-guided product tour below.