Subscription companies grow 5-7 times faster than other businesses
Written by Morten Suhr Hansen
The subscription revolution is evolving in the entire world and there isn’t just talk of a whim of fashion, but it is something that actually makes sense in business terms. This is emphasized by new figures from the American software supplier, Zuora. They have recently published their annual analysis of the subscription economy, The Subscription Economy Index, and it shows that companies with a subscription-based business model experience a growth, which is 5 to 7 times higher than other companies.
Zuora is the world leading supplier of economy-software to subscription services and their subscription index is based on more than 350 companies, who are clients of Zuora. Zuora has thus access to a wide range of financial data and other key numbers, which in an anonymized nature gives a broad picture of how the subscription companies perform.
The analysis shows that the companies in the subscription index had a yearly growth by 15, 2% since 2012. The 500 biggest companies in the United States have grown by 2% in the same period, while American retail companies have grown by 3,4%. Subscription companies has thus grown 5-7 times more than other companies.
The subscription index also gives access to comparing the companies in the index across other interesting key ratios. It is interesting to look at how the annual withdraw (churn) is across industries and regions. For example, the annual churn is 35% in B2C-companies, while B2B-companies have a relatively lower churn rate at 26%.
Discover the numbers behind The Subscription Economy here.
Furthermore, the numbers were presented at a big conference in London, Subscribed 2017, where more than 1000 attendees from across Europe dived into the new subscription economy and exciting subscription cases from companies like Caterpillar, Fender Husqvarna and Ford.