Subscription Models: Leveraging Low Usage Rates

Subscription models like gym memberships or car wash memberships rely on low usage rates to sustain profitability. The business counts on a large number of subscribers paying a low monthly fee despite not using the service regularly. For example, gyms need a significant number of subscribers to cover the high operational costs, even though a small percentage of subscribers actually frequent the gym. Similarly, car washes offer unlimited wash subscriptions knowing that only a fraction of subscribers will utilize the service frequently. This strategy allows businesses to remain profitable despite low utilization rates.