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Mar 2, 2011 | 3 minute read

Ecommerce Subscriptions: How to Turn Visitors Into Subscribers

written by David Chiu

This post is contributed by David Chiu, Ecommerce Industry Strategist with Elastic Path. David has 15 years of ecommerce experience under his belt, with a rich background in information architecture and design, online positioning for key consumer brands including Johnson & Johnson, Nestle and RBC Financial. David's recent webinar Winning with Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online is now available on demand.

Thanks to Apple and Google both announcing subscription payment features within days of each other, we’ve seen a resurgence of interest in monetizing digital content using a subscription model. Lost in the ensuing hype, however, is the simple maxim that unless access to your service or content is fundamentally desirable to have on an ongoing basis, visitors aren't likely to commit to any sort of subscription, no matter how streamlined or frictionless the actual purchase mechanics are.

Those involved with online media and content at the enterprise level have long recognized that selling subscriptions is a particularly demanding method of monetization, and a survey of executives in these verticals shows how this awareness has actually increased over time:

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So with two of the biggest names in technology moving into this space, do their new platforms really make subscription monetization attainable for everyone? Or are they destined only to capture revenue from the small proportion of services that would always have succeeded with this model? More importantly, what are the factors that determine whether or not a product or service is right for subscriptions?

In our latest Elastic Path ecommerce webinar, we looked at successful subscription-based services to see if we could identify the primary determinants of success with this business model, independent of technology platform. As it turns out, we found that market leaders all possessed at least two out of four key characteristics, with the very best showing strength in three:

1. Customer Experience

This is a basic prerequisite for success with subscriptions. Spoiled for choice and keenly attuned to good design and usability, today’s consumer won’t likely commit to a recurring fee for any product, service or content delivered in a manner that is difficult or unpleasant to use. More so with subscriptions than any other monetization model, customers will only pay for access to content if the “whole package” is desirable.

2. Ubiquity

Closely coupled to customer experience in a world where consumers are increasingly likely to access content or products on more than one device and in multiple locations, platform and geographical ubiquity has become a hallmark of the most successful subscription-based businesses. A service that is seamlessly accessible or transferable between PCs, tablets, phones, televisions, consoles, set-top boxes and other connected devices enjoys significant advantages in attracting subscribers.

3. Exclusivity

Probably the most difficult of the four factors to achieve, only the most unique and specialized products and services can rely solely on exclusivity to drive subscriptions. With literally thousands of content and experience alternatives available to consumers, the uniqueness threshold above which visitors feel compelled to become subscribers is now set very high.

4. Amortization

Although this is the most traditional and well understood of the characteristics, and one that has driven countless subscriptions for business SaaS, its application to consumer content and media is now being supercharged thanks to cloud storage, content streaming and all-you-can-eat entertainment providers like Netflix, Hulu and Pandora. Consumers are far more likely to consider purchasing a subscription if the alternative is spending thousands of dollars (or more) to own the content or software outright.

Interested in learning more about profiting through subscriptions?

Our free, on-demand webinar Winning with Subscribers: Top Trends and Best Practices for Selling and Managing Subscriptions Online explores more success factors, and also looks at how the various subscription payment platforms actually do help, or in many cases hinder, the successful monetization of online content.