The Mechanism and Components of Subscriptions in the Business Model

Abstract

The subscription business model transforms the traditional way products and services are consumed since it enables generating ongoing revenues, building loyal customer bases, and adapting to shifting customer tastes. This paper focuses on several key mechanisms and components of subscription business models to illustrate how they can help companies maintain Customer Loyalty, achieve Customer Lifetime Value, and achieve Annual and/ or Monthly Recurring Revenue in the face of complex business competition. For further innovation and adaptation of the subscription business model, there are opportunities to further study the role of digital tools in service delivery, customer participation, and revenue growth.