It started with Amazon.
They offered me a Prime Account, and I bought in. For $79 per year, I get free 2-day shipping on everything I buy from them, all year long. I love the idea of ordering a book, and having it in land on my doorstep two days later. I'm embarrassed to admit that my desire to maximize the value of my Prime subscription has caused me to give much of the business to Amazon that I used to give the local bookstores. Amazon sees that as pure customer loyalty.
Now United Airlines is offering me their version of Amazon Prime...
I received an email from United today, offering me a year's worth of Economy Plus Seating starting at $499. If I were to do the math for the extra legroom the way I did the math for the 2-day shippinng, I migh buy in.
If your product is one that customers buy again and again, an annual subscription to a premium serivce might offer you greater cash flow (United expects to see a new revenue stream from these subscriptions) and greater loyalty from those customer who buy in (even when you cost slightly more than the same service from a competitor, they'll buy from you to take advantage of the "free premium.").
But before deciding that a Premium Service Subscription is a no brainer for your business, consider this:
Do you have an "Amazon Advantage" (full inventory coverage on your category)? United doesn't fly to a lot of places that I go, especially starting from Portland, Maine. Therefore, their offer won't give me the perceived value that I get from Amazon Prime. If you can't satisy your customers' every demand within your product category, they won't see the value in a Premium Subscription Service.
Have you bought into a Premium Subscription Service? For what kind of product? How often to you re-purchase?