At the core of the subscription / membership economy are its participants:
- and recurring clients.
Though it's easy to conflate these roles, each denotes a unique relationship between the customer and the business.
What is an user?
In the context of the Software-as-a-Service (SaaS) industry, the term 'user' refers to individuals or businesses who use a particular software, irrespective of whether they're paying for the service or using a free version. Users can range from:
- free trial users, who may be testing out the service
- to premium users who pay for more advanced features or capabilities.
The relationship with users in a SaaS context often revolves around:
- usage metrics,
- feature adoption
- and user engagement,
all of which can drive towards:
- conversion (in the case of free users)
- or retention and upselling (in the case of paid users).
This is evident in platforms like Slack or Zoom, where both free and paid users coexist, each having different levels of features and services.
What is a member?
The 'membership' model suggests a deeper level of engagement. Members often pay a fee to gain exclusive access to a platform's content or services, contributing to a sense of community and exclusivity.
This model can drive customer loyalty and engagement, as seen with online communities like Patreon, where members support creators financially in return for exclusive content and perks.
What is a subscriber?
The term 'subscriber' typically denotes customers who pay a recurring fee to access a product or service. The key here is the regularity and predictability of payments, which can be beneficial for both parties.
- For the subscriber, it eliminates the need for repeated purchases and ensures continuous access to the product or service.
- For the business, it provides a predictable and steady revenue stream.
An example here could be a subscription to a digital news outlet, like The New York Times.
What is a recurring client?
Unlike subscribers who commit to regular, scheduled payments, recurring clients represent a type of customer who has saved their payment method with a company to facilitate future purchases. This model provides convenience for the customer and encourages repeat business for the merchant.
It's commonly seen in e-commerce environments, where customers may not want to commit to a subscription but do appreciate the ease of future transactions. For instance, a customer at a clothing online store may save their payment information to streamline their future purchases, becoming a recurring client.