Although several different pricing models can effectively capture IoT value, one of the most popular is the subscription model since it allows businesses to monetize the value for the initial purchase and for ongoing use. Selling a subscription for an IoT product has several unique elements that you should be aware of as an OEM. Here’s what you need to know about selling a subscription service package for your IoT product.
The subscription model is a recurring revenue stream that can be billed on any interval — weekly, monthly, quarterly, annually, or some other variation. With the subscription pricing model, there may or may not be an up-front cost for the product. IoT companies sometimes position their subscription offering as “IoT-as-a-service” since buyers are familiar with Software-as-a-Service (SaaS) subscription models.
If you look around, you’ll find a lot of examples of IoT products bundled with a subscription service across all industries. Subscriptions are highly popular in a variety of industries, including manufacturing, construction, farming, retail, healthcare, transportation, and more. Here are some examples of our IoT customers that use a subscription service to support their businesses.
Each of these businesses works in very different industries, but the subscription billing model works effectively for all of them, and these are just a few examples.
There are many benefits to using the subscription model with the Internet of Things, which has led to it being one of the more popular monetization approaches for IoT companies. Here are some of the most valuable benefits of a subscription monetization model.
Monetizing your IoT product using the subscription model is beneficial for both the OEM and the customer, making it an ideal billing model. Here are a few tips that will help you when you roll out your IoT subscription.
To effectively use a subscription model for your IoT product, you’ll need a flexible billing platform designed to facilitate it. Using a platform specifically designed for OEMs removes the burden of trying to modify a traditional billing system to suit the needs unique to IoT. For example, your platform will ideally also support tax management, PCI compliance, and subscriber platform security, and will easily integrate with the other business software you use.
Reach out to us to learn more about Zipit’s IoT billing platform and how we may be able to help you solve your own billing and subscription challenges.
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