Top 10 Subscription Business Model Examples of All Time

With most companies dedicating their efforts to the online space, subscription business models have become the go-to strategy for recurring payments and growth.

It’s a concept that has been applied to everything from film and television streaming services to daily essentials, including shaving gear and healthy food.

If you’re a business owner considering this approach, this guide to the best subscription business models will reveal the best practices that lead to success.

What Are Subscription Business Models?

A subscription business model involves customers paying to use products and services on a recurring basis instead of a one-time expense that confers complete ownership.

Customers pay for subscription services every month, with discounts frequently offered to customers who choose to pay annually.

There are various subscription business models, ranging from flat rate and tiered pricing models to freemium model pricing that includes optional extras for payment.

Subscription business models are typically used for products and services that customers use on an ongoing basis, with the option to cancel a subscription when it’s no longer required.

Running a subscription business model sometimes has a hands-off approach, making it a good side hustle to pay off debt once it’s up and running.

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Key Benefits Of Subscription-Based Businesses

A number of advantages to a subscription-based business model have allowed it to become such a prominent feature of the corporate landscape.

Serving customers worldwide, they’ve become impressively robust international businesses that can operate in multiple territories.

Here are some of the other key benefits of subscription models that have helped them succeed:

• Recurring revenue: The subscription business model is primarily categorized by its ability to draw in recurring payments from customers and retain existing customers over long periods through subscription billing.
• Improved customer retention: Since the subscription business model requires lower expenditure from customers, the low monthly cost enhances brand loyalty and increases customer satisfaction through feedback.
• Up- and cross-selling opportunities: Subscription models allow brands to keep in regular contact with customers, delivering more opportunities to promote upgraded subscriptions and other products that increase customer lifetime and business profitability.
• Robust data and performance metrics: The subscription model also provides extensive real-time metrics that companies can use to fine-tune their products and services, reducing customer acquisition costs and generating a predictable revenue stream.

With the ability to draw in recurring revenue and foster long-term customer relationships, subscription businesses aren’t going away soon.

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Top 10 Subscription Business Model Examples of All Time

With many variations of subscription pricing models, there are plenty of options for companies looking to apply it to bring in annual recurring revenue.

Let’s look at some of the leading subscription-based business models and how they combine their products or services to foster strong customer relationships and create recurring payments.

10. Barkbox

One common subscription business model is the subscription box, which delivers a selection of products to the consumer on a recurring basis.

The dog treat company Barkbox sells subscription boxes for dog lovers, catering to their desire for high-quality treats that their pets will love.

The subscription box service asks new customers what allergies and preferences their dog has, tailoring the box to their requirements.

Barkbox offers packages based on monthly themes that tie into customer feedback while promoting other products and services related to the brand.

Glowing testimonials from existing members reflect the positive customer experience, and the website also offers free resources to help owners take care of their dogs.

It’s a great example of how subscription box businesses foster healthy customer relationships and an inspiration for successful solopreneur businesses.

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9. HubSpot

With its focus on delivering software as a service to its customer base, HubSpot offers an extensive range of services as part of its subscription service.

Oriented toward full-scale marketing, sales, and customer service, HubSpot offers a freemium pricing model for professionals in these industries.

Their courses cover everything from making a website to the best practices for content marketing and search engine optimization.

It’s a broad-brush approach to the subscription-based business model, broken down into multiple categories, including marketing, sales, content, operations, and commerce.

As such, the brand has adopted a tiered pricing model, so customers pay for the services they need to perform their role effectively.

HubSpot is a compelling example of how subscription-based services can operate business-to-business and retain customers who value their services.

8. Qwilr

Like HubSpot, Qwilr focuses primarily on attracting new customers in professions such as marketing and sales, providing services such as content creation and analytics.

They offer a range of competitively priced packages for their customers, with each tier unlocking new features and services to help drive sales.

Qwilr offers a broad range of professional templates for sales proposals and contracts as well as handy resources, including case studies and a help center.

Services for streamlining workplace automation and recruitment and onboarding also exist, offering impressive value for small and large businesses.

It’s another textbook example of how subscription-based businesses can attract more customers by diversifying interlinked services.

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7. ClassPass

With health and fitness on the rise, ClassPass stands as one of the best examples of subscription business models that have successfully penetrated this growing market.

As with Barkbox, ClassPass requests customers answer a selection of questions to help determine the best plan for their fitness requirements.

This is then used to recommend a personalized subscription service that matches their lifestyle and includes fitness routines they’re more likely to engage with.

The website presents informative content and an attractive design for new visitors, making it a great point of reference for any small business startup checklist.

ClearPass also offers a good selection of customer plans, with a free trial period to allow people to try it out before committing their money.

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6. Birchbox

Another hugely popular subscription business model that offers regular deliveries of essential products is Birchbox, a makeup and hair specialist.

This impressive self-care business subscription model sends customers a selection of makeup, hair, and body products to generate monthly recurring revenue.

Up to six new products are included in each box, and a questionnaire keeps customers engaged and delivers the optimal selection for their needs.

Each subscription box has a different price, allowing paying customers to choose the box that matches their budget.

It’s a successful pricing strategy that has allowed Birchbox to become one of the leading companies in the health and wellness industry online.

5. Duolingo

With international boundaries less significant in the Internet age, more people are eager to learn a new language and improve their communication.

Several language learning apps are on the market, but Duolingo has achieved the most success and has drawn millions of daily active users to the platform.

Thanks to its robust and dynamic subscription business model, Duolingo’s usage-based subscription model has helped transform personalized online learning.

Functioning in a software-as-a-service subscription model, they incorporate AI and language science to ensure high-quality lessons.

This improves customer retention through a sense of continual progression that reflects the unique abilities of each user.

Duolingo offers plans tailored to school education, with subjects such as math included in the package for younger users.

This combination of courses dedicated to specific aspects of language and general learning tools has allowed Duolingo to expand continually over time.

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4. Spotify

Perhaps the most common perception of subscription business models is in the realm of entertainment streaming services, with Spotify among the leaders in this field.

This streaming service focuses on delivering an extensive back catalog of music and daily updates promoting new releases from artists and bands.

Spotify also provides many podcasts for its customers while allowing major record labels to generate huge profits from the subscription business model.

User interaction is encouraged through the use of customizable playlists and favoriting songs and artists to increase the value of its monthly price.

With a steady stream of new releases, Spotify can manage operating costs while retaining customers long-term as they follow the latest trends.

Expanding the platform’s music library is relatively low-cost, making it one of the best scalable businesses using the subscription payment model.

3. Hello Fresh

Like BarkBox and BirchBox, Hello Fresh is another subscription box service that delivers a selection of perishable items to customers each month.

In this case, the emphasis is on providing tasty and healthy meals that solve the perennial consumer problem of finding the time to prepare great food.

It functions as an online food truck business, with customers choosing the meals and recipes they want and receiving ingredients through the post.

Hello Fresh updates its menus based on seasonal foods, with concise instructions and correctly weighed ingredients, which also help people become better cooks.

They offer flexible subscription plans to match customer budgets and dietary requirements, keeping food waste to an absolute minimum.

Food boxes are also available for vegetarian and vegan customers, ensuring that HelloFresh captures as much market share as possible.

Customer retention rates are maintained through a steady stream of new and enticing recipes, so they don’t get bored eating the same meals each week.

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2. Dollar Shave Club

The subscription business model for Dollar Shave Club is another excellent example of how the model works best when applied to essential daily supplies.

Most men shave regularly, particularly those who work an office job, and Dollar Shave Club recognized the gap in the market for shaving product deliveries.

They offer customers everything from handles and blades for shaving to aftershave and balm solutions to keep itching and scratching to a minimum.

Dollar Shave Club’s success has also been achieved through the brand’s robust social media presence and affiliate programs online.

Their clever marketing initiatives have included many paid promotions on popular YouTube channels that focus on men’s interests and lifestyle habits.

This differentiates them from other successful subscription business models emphasising traditional mainstream media for their marketing drives.

The result of these unconventional marketing initiatives is a domination of the shaving market, with few competitors to Dollar Shave Club online.

In addition to their subscription service, the website also has an online store that allows for one-off payments and direct purchases of their products.

1. Netflix

Few companies have achieved the same level of success as Netflix in terms of online streaming services for movies and television shows.

Initially launched as a business that mailed customers DVDs, their successful transition to streaming represents a case study that countless other platforms have sought to emulate.

Its leadership successfully overcame the core reasons subscription services fail, positioning itself at the forefront of the streaming service industry.

This success is due to several factors, including the platform’s reinvestment of profits into producing original and exclusive content and the global entertainment acquisition.

For its customers, this has led to high retention through the ongoing updates of television series and growth in countries such as South Korea.

Customers can choose from various subscription plans with Netflix, from basic packages that include advert breaks to multi-device options for families.

This selection has allowed customers to tailor their Netflix subscription to their preferences, saving money on unnecessary monthly bills.

From a corporate perspective, Netflix’s impressive brand manifesto has allowed them to stay on message and deliver ongoing revenue growth.

As such, Netflix remains one of the biggest success stories in the world of subscription business models that entrepreneurs can learn from.

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Summary

Whether selling subscription boxes encouraging healthy eating or applying the subscription revenue model to entertainment, the pricing model has a proven track record.

If you’re launching a startup and want to retain customers and achieve monthly recurring revenue, the subscription-based business models covered in this article are essential research.

It’s an increasingly popular alternative to the traditional business model, enhancing customer lifetime value while ensuring future revenue.