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Practice Reading: Fill in the Blanks (Dropdown) ID: #1230 Businesses benefit
Instructions
Businesses  benefit  because  they  are  assured  a    and  constant  revenue  stream  from  subscribed  individuals  for  the  duration  of  the  subscriber's  agreement.  Not  only  does  this  greatly  reduce  uncertainty  and  the  riskiness  of  the  enterprise,  but  it  often  provides  payment  in  advance,  while  allowing  customers  to  become  greatly  attached  to  using  the  service  and,  therefore,  more  likely  to  extend  by  signing  an  agreement  for  the  next  period  close  to  when  the  current  agreement  expires.
In  integrated  software  solutions,  for  example,  the  subscription  pricing    is  designed  so  that  the  revenue  stream  from  the  recurring  subscriptions  is  considerably  greater  than  the  revenue  from  simple  one-time  purchases.  In  some  subscription,  it  also  increases  sales,  by  not  giving  subscribers  the  option  to  accept  or  reject  any  specific  issue.  This  reduces  customer    costs,  and  allows  personalized  marketing  or  database  marketing.
However,  a  requirement  of  the  system  is  that  the  business  must  have  in  place  an  accurate,  reliable  and  timely  way  to  manage  and  track  subscriptions.
From  a  marketing-analyst  perspective,  it  has  the  added  benefit  that  the  vendor  knows  the  number  of  currently  active  members,  since  a  subscription  typically  involves  a    agreement.  This  so-called  'contractual'  setting  facilitates  customer  relationship  management  to  a  large  extent  because  the  analyst  knows  who  is  an  active  customer  and  who  recently  churned.
Additional  benefits  include  a  higher  average  customer  lifetime  value  than  that  of  nonrecurring  business  models,  greater  customer  inertia  and  a  more  committed  customer  base  as  it    from  purchase  to  opt-out  decisions,  and  more  potential  for  upselling  and  cross-selling  other  products  or  services.  However,  the  size  of  the  customer  support  organization  increases  so  that  the  paid  customers  stay  happy.

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