Does the subscription model work in the B2B market?

The subscription model has become well established in the consumer market. Customers enjoy the convenience of being unburdened. It also fits with the trend of consumers being more willing to share products, without the need for exclusive ownership. But what about the business market? Are B2B subscriptions just as popular?

In the B2B market, subscription models with recurring payments are less widespread. At least, subscriptions to physical products are not yet the norm. SaaS services and digital subscriptions have, of course, been around in this market for quite some time. Just like retainers for fixed partners and suppliers – you could also consider those as subscriptions for continuous service delivery. And technically, leasing things like company cars and copiers can also be seen as a subscription model. So yes, subscription models are definitely present in the B2B world; many B2B software providers already work with licenses and periodic payments. Still, the real subscription boom in this market has yet to happen.

What is the ROI of a subscription?

Besides the differences in offerings, there are also distinctions in how agreements are made. While consumers often decide on a subscription right away, in business this decision usually takes longer. Not everyone within a company is authorized to enter into a contractual obligation, and there’s more focus on the ROI of the offering. In addition, it's still common in the B2B landscape to pay by invoice with payment terms of several weeks.

Still, the subscription model definitely presents opportunities in the B2B market. It all starts with a rock-solid value proposition. Even more so than in the consumer market, you’ll need to clearly communicate how the subscription-based product or service helps business clients reach their goals and manage costs effectively. It’s also important to segment both offering and pricing. Think carefully about whether your product or service lends itself to usage-based pricing or whether a flat fee is a better fit for your business clients’ needs.

More loyalty, less churn

Customer retention is a core part of the subscription model. With business clients, you’ll need to deliver continuous value – even after the subscription is signed. That means staying in close contact throughout the subscription period: is the client satisfied? Does the current plan still meet their needs? Regularly collecting customer feedback is key. That feedback allows you to proactively adjust your service or offering to match evolving needs. It also shows your clients that you genuinely care about their success – which boosts loyalty and helps reduce churn.

The advantages of a B2B subscription model are clear. Recurring payments create a stable and predictable revenue stream. Subscriptions also provide great opportunities to strengthen and expand the customer relationship with premium services and add-on subscriptions. But implementing a subscription model requires organizational changes. Marketing and sales take on a different role, and systems and processes need to be adapted to support subscription flows. Think of your ERP system and financial operations. Subscriptions demand a new financial strategy and approach.

Attention and personal service

For many organizations, subscription management is a whole new game. It’s crucial that the entire financial process runs smoothly – from onboarding to upgrades or downgrades to credit management. Buckaroo is the committed payment partner that ensures all payment processes are seamless, secure, and reliable. We’re happy to advise on the best setup for your specific products, services, and markets. Thanks to our in-depth experience in developing payment solutions, compliance, and customer experience, we help businesses successfully implement a B2B subscription model. With personal service and attention, we enable entrepreneurs and organizations to focus fully on their core business.