The Sales model for the Economy of Things – The Subscription Funnel

The Sales model for the Economy of Things – The Subscription Funnel
06.10.2019 Rainer Wiedmann

The Economy of Things networks companies via connected products with customers. Clients expect additional services and usage-based payment models. This is why the old sales funnel is no longer sufficient as a framework for commercializing products. iq! has designed a new funnel that meets all new requirements and called it “The Subscription Funnel”.

The classic Sales Funnel is changing dramatically

Marketeers until recently had a simple life. The classic sales funnel led potential customers via the initial contact (reach) and product probing (information, evaluation) to purchase (sale). The large number of interested parties shrank until the much smaller group of buyers remained. No company knew if and how the product was used. Then the work was done until a new product was launched.


The New Subscription Funnel by iq! Management Consulting
Source: iq! Management Consulting

As more and more products are equipped with sensors and thus digitized, the conventional sales funnel is changing dramatically. The usage data of a digital product can be recorded and transmitted to the manufacturer. This simple fact is revolutionizing manufacturing. For the first time, companies track how their products are used. These insights can be translated into increasingly relevant products and add-on services to be sold on top.

In the case of digital products, usage instead of a product price can be invoiced. From the company’s point of view, this shifts sales backwards, but it stabilizes them and makes them more predictable. These usage-based fees are nothing more than a subscription.

Many companies out of various industries started to implement subscription models. 62% of US Customers are now Amazon Prime members. Less prominent examples are: Blue Apron (weekly food packages), Enercare (rental of ovens and air conditioning systems), Birchbox (monthly delivery of cosmetics) or SIXT share (Carsharing).

Adobe initiated this development. A few years ago, the software company radically changed the distribution of software packages from a one-off price to the use of online subscriptions (see Blog Article: Adobe – Pioneer of the Subscription Economy)


The marketing and sales world is not made any easier by the Economy of Things. On the other hand, the potential increases immensely. In order to raise it, however, manufacturing companies must massively change some of their structures. Service must be established and rethought. Companies must learn to enter into a lasting relationship with their customers and fill it with so much added value that the customer wants to stay. This is anything but simple and requires radical rethinking in marketing, sales, after sales, organization, IT and processing. In many cases, a separate digital unit dedicated to implementing the Economy of Things can help to accelarate the process.



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