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  • Writer's pictureGeorge Mellor - KloudReadiness, LLC

The Debate is Over...

Businesses demonstrate growing preference for Subscription Services

The Subscription Economy® has grown more than 400% over the last 8.5 years, according to @Zuora's latest Subscription Economy Index™.

The COVID-19 pandemic and subsequent recession have only added fuel to the fire and provided an additional catalyst that has significantly accelerated the subscription opportunity.

According to Zuora’s annual Subscription Economy Index™ (SEI) subscription businesses outpaced the Standard & Poor’s 500 (S&P 500) revenues by almost 6X during the downturn. 

In fact, legacy transactional sales contracted at a rate of negative ten percent (-10%), while subscription businesses posted a twelve percent (12%) gain during the same period.

The trend extends across a multitude of sectors including technology, healthcare, manufacturing, media, and education. Businesses and institutions are altering their business models and endeavoring to transform and develop subscription-based revenue streams.

The intent is to counteract the significant reduction in capital expenditures (CAPEX) being seen as organizations look to conserve cash and hunker down for what looks to be a long road to recovery.

So, I recommend you look at Zoura’s findings and look to truly understand the power and value that adding subscription to your current business mix will bring. 

More importantly, you should seriously consider adopting and embracing a subscription business model as it will make your current business more resilient and allow you to build a more sustainable and growing business - even as you look to weather the current economic storm.

If not now, then when? These times require adapting and adjusting to the new realities that the world has foisted upon us. 

Remember, subscription revenue is the gift

that just keeps on giving…

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