Subscription plans are a great way to help small businesses grow their revenue and customer base. But what if we told you this model is losing its charm in the post-pandemic era?
If you are a company that serves small businesses, you need to be aware of this trend. It could have a massive impact on your business.
According to Tarci data, in 2022, there was a 49% drop in small businesses offering subscription plans to their own customers. That’s a massive shift in the subscription economy.
Why did this happen? Read on to get answers to these questions. We will also provide tips on adapting your offer to the new preferences of small businesses and how to attract more customers with this new trend.
Why Small Businesses Are Moving Away from Subscription Plans
You may wonder why small businesses are moving away from subscription plans when they offer many benefits. After all, subscription plans can help small businesses generate steady income and loyal customers.
However, Tarci’s data reveals several factors that influence small businesses’ decisions to cancel or avoid the subscription pricing model for their customers. Here are some of the main ones:
Impact of Post-Pandemic Consumer Behaviour
The COVID-19 pandemic has undoubtedly reshaped consumer behaviour, with lasting effects influencing purchasing decisions. As customers emerge from the pandemic, their priorities and preferences change.
Flexibility, customization, and a desire for more control over their spending have become paramount. This mindset shift has diminished the appeal of rigid subscription plans and has paved the way for more personalized and on-demand services.
Shifting Market Dynamics
The post-pandemic recovery phase has shifted market dynamics. Consequently, the business landscape transforms as companies recalibrate their strategies to adhere to changing demands.
Traditional subscription models may not align with customers’ new expectations and needs. As a result, businesses must adapt to remain relevant and competitive in the market. To adapt to the changing market, companies can explore alternative revenue streams, diversify offerings, or adopt hybrid models that combine subscriptions with à la carte options.
Adapting to the New Normal: Serving SMBs Better
After transitioning from traditional subscription models, small businesses will have certain expectations from their service or product providers. Here are five fundamental needs that small businesses will likely prioritize:
- Customization and Flexibility: Data has shown that small businesses expect service providers to offer customizable solutions tailored to their specific needs and budget. They will value the ability to choose and pay for services based on their requirements rather than being tied to a rigid subscription plan.
- Scalability and Growth Support: As small businesses strive for growth, they seek service providers who can scale their offerings accordingly. They will look for partners who can accommodate their evolving needs, provide additional resources as required, and support them in their expansion journey.
- Cost Efficiency: Small businesses prioritize cost efficiency in selecting services. They expect competitive pricing models that offer value for money and align with their budgets. Transparent pricing structures and the ability to optimise costs will be crucial considerations.
- More innovation and adaptation: Small businesses will expect their service providers to offer more innovation and adaptation that keep up with the changing market dynamics and consumer behaviour. For example, they may want to see new or improved products or services, more personalized recommendations or support, or more data-driven insights.
From Insights To Action: Harnessing Tarci Data To Inform Service Offerings
The subscription slump is not just a drop in demand for subscription-based services or products; it is a sign of a changing market that demands a swift and intelligent response. Tarci data provides you with the opportunity to identify the evolving needs of small businesses, allowing you to tailor your products and services to meet these needs.
For example, small businesses need to match their expenses with their income. They want more flexible and value-driven service or product options from their providers. Tarci can give you access to timely data of small businesses that have recently changed their pricing model, and allow you to offer them a solution that best fits their needs.
For instance, if you are an insurance provider, you can offer the identified small businesses a pay-per-use or usage-based insurance plan that adjusts the premium based on risk level and activity. These innovative insurance products can charge based on the number of employees, customers, or small business sales instead of a fixed rate.
Take action today and contact the Tarci data team to gain a competitive edge and attract more customers in this challenging market.