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New sales and marketing techniques for the manufacturing industry incorporating a subscription model

New sales and marketing techniques for the manufacturing industry incorporating a subscription model

Manufacturers are always looking for new ways to boost sales and better serve customers. One approach that is gaining popularity is adopting a subscription business model. A subscription model allows customers to pay a recurring fee in exchange for ongoing access to a product or service. This type of recurring revenue can provide manufacturers with stable cash flow and stronger customer relationships.

There are many industries, like software as a service (SaaS), that have seen great success with subscription offerings. Manufacturers are now starting to explore how they can apply a similar strategy to enhance sales and marketing efforts.

A few key techniques manufacturers can utilize include:

Subscription Access to Products

Some manufacturers are moving to a razor/razor blade model where customers purchase durable equipment like 3D printers up front, then pay a monthly or annual fee for ongoing access to supplies like filament. This allows the manufacturer to generate revenue from consumables long after the initial equipment sale. It also encourages customers to continue using and replenishing those supplies from the original manufacturer.

Another option is offering subscriptions for equipment servicing and repairs. Rather than paying for each individual service call, customers can subscribe to an all-inclusive maintenance plan. This provides peace of mind for the customer while generating predictable cash flow for the manufacturer to cover servicing costs.

Software & Digital Products

Manufacturers of products with software or connectivity components have an opportunity to offer digital subscriptions. For example, subscription plans for access to proprietary software, online training programs, software updates/upgrades, data analytics and reporting tools, etc. This transforms what would otherwise be one-time purchases into ongoing recurring revenue streams.

Consumables & Parts

Certain manufacturers may sell consumable parts or supplies on a subscription basis. For instance, offering subscription filter replacements for water filtration systems or toner/ink cartridge subscriptions for printers. Consumable parts generate high-margin revenue and subscriptions create reordering consistency. Many customers appreciate the convenience of automated replenishment too.

Customized Equipment Configurations

Rather than purchasing standardized equipment up front, some manufacturers allow customers to customize configurations on a subscription basis. For example, subscribing to add/remove certain software, hardware or service features each month. This gives customers flexibility while also creating more frequent touchpoints and opportunities to upsell additional options over time.

Marketing Advantages of Subscriptions

In addition to the financial benefits, a subscription model provides marketing advantages that can boost sales. Subscribing customers are incentivized to continue their membership which fosters brand loyalty. Their recurring payments also make it easier to justify additional or expanded purchases over time. Subscription status allows targeted retargeting campaigns too. Analytics from subscription data offers deeper customer insights to improve future products, services and marketing.

Implementing a Subscription Model

Any manufacturer considering adding a subscription component needs to evaluate infrastructure requirements. Key things to address include payment processing, subscription/renewals administration, inventory & logistics for recurring shipments, expanded customer support etc. Partnering with experienced subscription management platforms can mitigate risks and speed adoption. Careful audience targeting is important initially – existingcustomers may be most receptive before expanding to new customer segments. Regular communications keep subscribers engaged and identify potential for cross-selling or upselling additional options. With thoughtful implementation, subscription revenues can significantly contribute to long-term growth for manufacturers.

In summary, subscription-based models present an innovative opportunity for manufacturers to strengthen customer bonds while generating more reliable profits. By creatively applying subscriptions to core products, services or consumables, manufacturers can build recurring revenue streams that complement traditional sales. Those who embrace this approach will be better positioned for ongoing success in an evolving business landscape. Manufacturers would be wise to explore subscription potential through audience research and pilot testing to identify the best applications and implementation strategies.

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