Understanding the New Subscription Economy, Part 2

Understanding the New Subscription Economy, Part 2

New Subscription Economy and Strategy

Hopefully, you read our blog “Understanding the New Subscription Economy.” It gives you a quick synopsis of the first half of the book that everyone is talking about, Subscribed: Why the Subscription Model Will Be Your Company's Future – and What to Do About It. It matters because subscription businesses grow nine times as fast as the S&P 500, with B2B subscription sales (22%) growing even faster than B2C subscription sales (16%)! B2B companies, from Adobe to Caterpillar, are selling subscriptions like hotcakes. 

The key takeaway is that our economy is shifting from a product economy (selling stuff) to a subscription economy (selling subscriptions to stuff). The big advantage to the subscription economy is that it generates a recurring, predictable revenue stream. 

The key is to know your customers and become a master of personalization . Once it’s implemented, it requires less marketing, sales, and accounting  to keep it going. The key things you need to know about the subscription economy are 

The subscription economy can be summed up in three words: Adapt or Die. 

Fortunately, you have friends at BluSynergy who can help you adapt. Keep reading for a synopsis of the second half of the book, Subscribed: Why the Subscription Model Will Be Your Company's Future – and What to Do About It.

Making the Shift from Products/Services to Subscriptions

The good news is that you already have a great set of products and services. You have a team that knows how to do their jobs, and they do them well. How do we know that? Because you’re still in business and reading this blog. 

The challenge is in shifting how you market, sell, bundle, upsell, and manage your new subscription business model. With subscription models, customers, not channels or products, are the focus of your business. In order to keep existing customers and win new customers, you have to improve your customer experience. And, that means tearing down the silos between your teams—R&D, designers, marketing, sales, finance, and customer service. It also means continual process improvement, or a never-ending beta state.

What do we mean by a never-ending beta state with the customer as the focus? Let’s take a look at the subscription snack food company Graze. They are a UK company that sells traditional food like vinegar crisps, better known in the U.S. as salt and vinegar potato chips. When they launched in the U.S., they did no market research. That’s right. They spent $0 on market research.

Instead, Graze took their existing product line and introduced it to the U.S. Then, they waited. They watched their sales dashboards. Spicy barbecue flavors sold, chuntneys did not. They learned from their customers how to optimize sales in the U.S., simply by watching sales patterns. Think about your products and services. How could you follow Graze’s agile subscription business model? The folks at BluSynergy would be happy to help.

When the 4 Ps of Marketing Become S and 3 Ps 

In the product economy, marketing was dominated by cute mascots, clever taglines, and Super Bowl ads. Who doesn’t love the Geico Gecko? Remember, “Where’s the beef?” But, in the subscription economy, sales and marketing are all about big data. Product turns into Subscription, and what you have are the S and three Ps. 


“But, wait,” you’re thinking. We already have successful channels (places) to sell our products. How could we possible give those up? You don’t have to. What you need to do is retool your channels so that you can transition them into relationships. This requires embracing never-ending beta.

The key is to assign each subscriber a unique ID so that you can track exactly what they do and when. Then, you wait and watch, just like Graze did. You will begin to see patterns, allowing you to push out personalized notifications to your customers. You begin building a relationship with them. You’ve been doing this with your marketing, now you’re doing it with big data.


And, what about your advertising budget? You spent a lot of time increasing your brand reputation and awareness. Is that money down the drain? Absolutely not!

When Price becomes Subscription, promotion becomes all about storytelling and customer experiences. And, like all good stories, your story needs a what (your subscription service), a how (how you sell to them), and why (your purpose). Have you seen Simon Sinek’s Ted Talk on the power of why? 

Sinek talks about Steve Jobs and Apple, the inventors of why-how-what storytelling. They don’t sell great computers (what) that are beautifully designed (how). 

Apple challenges the status quo and thinks differently (why); they do that by selling beautifully designed, user-friend products (how); those products happen to be good computers (what). So, when someone buys an Apple product, they join a community of people who think differently and enjoy the experience of using a beautifully designed product.

So, how do you tell your story like Apple? The key is understanding your big data.


Congratulations! you’ve converted your channels into relationships. You’re effective in selling your why and providing your customers with beautiful experiences. How do you adapt your pricing from a product to a subscription economy?

Confusing a la carte menus of dozens or hundreds of options will confuse most of your customers. You could offer a simple monthly subscription fee; but that’s like having an all-you-can eat buffet. You don’t get extra money when the chef comes up with a great recipe for lobster flambé. So, what do you do?

There are two basic models for pricing in the new subscription economy. The first is consumption-driven growth and pricing. Think of Salesforce; when you add users, your subscription fee increases. Or, consider Dropbox, as the size of your files increases, so does your monthly fee.

The second model is capability-driven growth and pricing. Think of Adobe Creative Cloud; you can pay a monthly fee for Photoshop or Lightbox or InDesign. Or, you can buy a bundle. The bundles are personalized for students, consultants, and businesses.

There’s a lot to think about with the new Subscription Economy and strategy becomes increasingly important. At BluSynergy, we don’t want anyone to be left behind. You don’t have to be a Fortune 500 company to work with us to master your subscription model and create predictable recurring revenue. 

BluSynergy is here to support you in adapting to the subscription economy. Let us help you design a subscription sales strategy that integrates seamlessly into your current business model. We believe there is always room to grow!

Read more about Apples to Apples: What B2B Can Learn from B2C Subscription Models

Give one of our BluSynergy sales consultants a call today at 731-INVOICE (731-468-6423).

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