Impact Pricing Podcast

Memecast #5: Subscription is a Business Model

Is subscription a business model or payment model? Probably the easiest example to think through is Porsche. 

Yes, you can subscribe to a Porsche

But before I describe that to you, let me talk about buying a Porsche. Let’s say you want to go buy one, there are four different payment models that you could use. 

You could pay cash, you could take out a loan from a bank, you could take out a loan from the dealership who’s selling you the car, and you could lease the vehicle. 

Subscription is a business model, not a payment model.

– Mark Stiving

Now, leasing may not be exactly ownership, but it acts almost exactly like owning the vehicle. In each of these four cases, the experience from the consumer is almost identical when it comes to the product. The only thing that’s different is how we ended up paying for it.  

But now let’s jump to the subscription. In Atlanta for sure, you can subscribe to a Porsche for a measly 2000 or $3,000 a month, you can drive any Porsche you want, any day you want. That’s pretty cool. They’ll even cover all the maintenance fees, they’ll pay for the insurance, you’re simply paying for the right to drive a Porsche whenever you want.  

Notice that’s a very different experience than owning a Porsche.  

Can you think through what are the benefits that your buyers are expecting when they buy your product and use your product?

And is it possible that we could, we can take that product and that series of benefits that they’re truly looking for, and deliver the benefits to them without requiring them to own our product?  

And then could we deliver those benefits so it’s a stream of benefits?

And the stream of benefits never ends, it goes on forever. In that case, maybe our buyers will pay us forever. 

We hope you enjoyed this memecast. If you see any of our memes that you’d like to move to the top of our memecast list, please let me know. If you have any feedback, definitely send it. You can reach me at [email protected]. Now, go make an impact.

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Tags: Accelerate Your Subscription Business, ask a pricing expert, pricing metrics, pricing strategy

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Our Speakers

Mark Stiving, Ph.D.

CEO at Impact Pricing

Alexis Underwood

Managing Director at Wynnchurch Capital, L.P.

Stephen Plume

Managing Director of
The Entrepreneurs' Fund