Maksym Yemelyanov - Fotolia

UK spending on subscription services triples in a year

Almost all UK adults subscribe to services for products they would traditionally pay for up front

Almost 90% of UK adults are spending an average of £56 a month on subscriptions to services as businesses increasingly change how they serve customers and receive payments.

With disruption across sectors happening at a rapid rate, traditional businesses are looking for new ways to attract and retain customers. People want to have access to services when they need them via smartphones and want the community-like experience of a subscription.

According to a YouGov survey of more than 2,000 people in the UK, sponsored by subscription software firm Zuora, 89% of British adults subscribe to a service rather than buying up front. These services, powered by modern technology such as mobile and business intelligence, are enabling businesses to offer access to the products and services that people want, when they want them.

Such subscriptions include newspapers and magazines, for example, but go much further. Companies in many sectors, used to selling a physical product, are getting into the subscription economy and take a recurring fee for their services.

For example, car makers are looking at ways to provide services where customers pay to use cars rather than buying them outright.

And in the telecoms sector, Telenor, traditionally Norway’s state-owned operator, has launched a subscription-based service for businesses trying to use internet of things (IoT) access to technology.

Meanwhile, airline Surf Air has launched a subscription-based service in Europe. Since May, for a monthly charge and an initial membership fee, customers in Europe have been able to subscribe to Surf Air and receive unlimited flights.

Read more about subscription-based business

  • Advances in technology are changing the way consumers buy and use goods and services, but technical complexity is a concern.
  • Zuora’s billing software helps companies manage the subscription lifecycle for their customers, including pricing and packaging, acquisition, billing, collection, renewal and analytics on subscriber data.
  • Zuora, a cloud startup partly financed by Salesforce.com king Marc Benioff, has created a market out of subscription billing services in the cloud.

Telenor and Surf Air both use software from Zuora to manage their business model.

“Nearly all of the British population is part of the subscription economy,” said John Phillips, vice-president Emea at Zuora. “From heating to healthcare, Zuora’s new study proves that the subscription-business model has gone mainstream and consumers have bought into recurring payments.

“The only way businesses can sustainably maintain relationships with consumers and grow is by moving away from their product-centric mentality and creating long-term brand affinity based around flexible subscription-based services.”

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