How companies are benefiting from a subscription-based model
As consumers increasingly prioritize convenience, personalization and flexibility, subscription-based models have become a cornerstone of modern commerce.
6 minute read
Key Takeaways
- Subscriptions models now span industries from automotive to wellness, and even B2B services.
- Predictable revenue and deeper customer engagement make subscriptions attractive for businesses.
- Retention strategies, AI personalization and flexible billing are essential to long-term success.
Subscription services have changed the game
From streaming services to sustainable goods, subscriptions have gone mainstream. Businesses are creating models that offer value, personalization and ease — and it’s reshaping how they grow, engage and retain customers.
“We’ve entered a whole new retail environment. Today’s consumers care less about ownership and more about services like access, life automation, predictability, data and insights.”
Why businesses love subscriptions
- Recurring revenue – Subscriptions provide a predictable revenue stream, smoothing cash flow and making it easier to plan long-term investments and expansion strategies.
- Customer loyalty – Regular engagement with customers creates deeper relationships, building trust and long-term brand affinity.
- Data insights – Subscriptions generate rich behavioral data, enabling smarter decisions.
“Subscription services are a great way for merchants to establish predictable revenue.”
Retention is the new growth
With acquisition costs rising, businesses need to double down on keeping customers engaged or risk losing them, and their regular revenue, entirely. Leveraging the rich data that subscription models provide can give you more insight into the reasons for churn, as well as tools to help you reduce it.
Four top churn triggers and how to overcome them
- Poor onboarding processes or technical issues
When a new customer subscribes, the first few days are critical. Consider:
- Revising your onboarding process to help customers understand the value of your offering
- Providing excellent customer service to promptly deal with technical issues
- Seeking feedback for continuous improvement
- Lack of perceived value
Try using your customer data to create:
- Behavior-based win-back campaigns
- Loyalty incentives and personalized offers
- AI-driven churn analytics and proactive engagement
- Inflexible billing or cancellation policies
Review your current policies:
- Look for ways to make them more customer friendly
- Ensure you’re communicating with them effectively
- Failed payments due to expired cards
Try Card Account Updater tools to prevent payment failures:
- These “refresh” securely stored cards that have been replaced with a new number or expiration date.
“Data is critical to driving a subscription model, but it’s even more important to interpret and understand what the data is telling your business.”
Is your business subscription-ready?
- Can your product or service deliver recurring value?
If it can keep customers engaged over time, it could be a good candidate for a subscription model.
- Do you have the infrastructure for automated billing and data analysis?
Ensure your internal structure is compatible with the cyclical nature of subscriptions.
- Are you ready to personalize and adapt to customer needs?
Create a plan for leveraging customer data to find ways to reduce churn. Artificial intelligence (AI) has a role to play here, delivering hyper personalized experiences for customers through user behavior-based recommendations.
- Do you have robust data security processes in place?
Work with a payment provider that can safeguard customer data. You can also harness AI to strengthen your fraud detection capabilities.
How to get started
Ready to take the next step? Connect with us today and turn your vision into results.
Mousumi Chatterjee, Director, Merchant Services, Bank of America
Juan Garrido | Head of Merchant Services Product in Global Banking, Bank of America
