The subscription business model is booming. In recent years, the market has grown by more than 100% a year, increasing from $57 million in sales in 2011 to $2.6 billion in 2016, according to one expert[i]. That number is even higher today. In a recent survey, 15% of online shoppers reported subscribing to at least one e-commerce site over the past year, and 46% of respondents subscribed to an online streaming-media service such as NetFlix.[ii] The five most popular subscription sites of last year were Amazon, Dollar Shave Club, Ipsy, Blue Apron, and Birchbox. Since institutional investors now pay a premium for subscription-based revenue, subscriptions will only be offered and marketed in smarter and smarter ways.
While this is great for businesses, subscriptions present a problem for many consumers. It is easy to sign up in haste and repent at leisure. One of the principal attractions of the model for businesses is the monthly transaction fees can be so small that most people don’t even notice them, allowing companies to get paid each month without doing much of anything. The practice of offering the first month free, but requiring a credit card to start, and then billing in advance seems designed to encourage customers to lose track of their spending. If you own multiple accounts or joint accounts the complexity is even greater. As if our electronic lives were not chaotic enough!
Fortunately, what technology giveth, technology can taketh away. There are several applications designed to manage your subscriptions in one place. Here are three:
TrackMySubs.com– This online service allows you to select the company, enter the renewal date and cycle, set the price and currency, and receive an alert. TrackMySubs.com enables you to start with five subscriptions for free then sign up for a monthly subscription (naturally) with more accounts.
Trim– Trim is a more comprehensive online financial management service that empowers its users to manage their subscriptions through cell phones and social media. Trim will scan all your credit card and debit card statements to find subscriptions and then give you the option to cancel them via a text. It also offers other services such as bill renegotiation.
Truebill– is a mobile phone app that makes it easier to cancel subscriptions. It will also let you know when the cost of a subscription rises, giving you a chance to rethink the value the service provides. Like Trim but unlike TrackMySubs.com Truebill requires access to your accounts to work and offers other financial services such as bill renegotiation.
The key to selecting the best package is to understand the business model behind it. If the service is free, then you are the product. If you have to provide access to your banking accounts, then there is a risk that your account information will be compromised.
One of the fastest growing investment themes in venture capital is Fintech (short for Financial Technology if you hadn’t guessed). This capital, along with advances in technology, have touched off a mini arms race between businesses offering new subscription services and businesses helping manage subscription services. In the current climate of innovation, it pays to keep an eye out for new products entering the market. Some of them are bound to be very helpful in managing your finances in the future.
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