Lately, more service-based companies have jumped aboard the subscription economy, proving to industry leaders and consumers alike that subscriptions can be used to sell more than a monthly box of beauty products or razors. With its ability to customize, low upfront cost and predictability of revenue, offering a subscription service has clear benefits for both customers and businesses.
Service-based brands, including Xbox Live, Adobe’s Creative Cloud and AppleCare, have already successfully implemented subscriptions, and it’s only a matter of time until the health care industry also adopts what could be a revolutionary commerce model. For consumers and employees, subscriptions within health insurance would remove many of the frustrating barriers of traditional policies, forever changing the way people think about their coverage.
Benefits to brokers and advisors
Companies that have adapted service subscriptions have already cited quite a few benefits, such as:
Predictable revenue: With a subscription model, customers pay upfront for the service and will continue to pay that monthly or yearly rate for a specified period of time. Just keep providing coverage for whatever policy a customer subscribed to, and you will typically know within 3 percent what next month’s revenue will be.
Customizable add-ons: Insurance policy subscription models would give customers the ability to add additional services to their policy. These add-ons add up, giving customers a larger policy package than they previously would have purchased. Companies that have already implemented subscription services have seen as much as a 74 percent increase in average order value from “add-ons” to its subscription offers.