Recurring billing models need to bring recurring value to customers.
It’s easy to understand why brands love subscription models. They offer better revenue predictability, increase opportunities for customer engagement, enable you to easily calculate the lifetime value of a customer, manage inventory, and a host of other benefits. However, as subscriptions grow in popularity, we’re seeing more brands offering them, but missing the mark on what it takes to be successful – a relentless drive to add continued value for customers.
The most effective subscription providers approach things from the customers’ perspective, tailoring offerings to meet shopper desires.
Building a subscription offering that benefits consumers
The number one consumer benefit inherent in almost any subscription offering is convenience. Whether it’s the product offering itself that makes a customer’s life easier, or the passive payment method that allows for “set it and forget it” purchasing, convenience is paramount to a subscription model. But if done correctly, subscriptions should offer value beyond convenience.
One obvious benefit is the ability to offer better deals. As brands generate savings from the increased customer retention and revenue predictability, they can pass those savings back to loyal customers. Subscriptions also allow for better personalization. The overall increase in customer touchpoints means an onslaught of shopper preference data. If used correctly, this data can add value to consumers in the form of personalized promotions or product offerings. The end result is stronger customer-brand relationships, benefiting the customer experience and increasing opportunities for additional services and promotions.
A better way to buy – communicating subscription benefits
Brands need to keep in mind that consumers might not automatically understand the benefits of a subscription offering. Even after they’ve signed up, they’re continually deciding whether it’s worth the recurring cost. When marketing your subscription offering, you need to be crystal clear what value you provide, positing the offering as a superior customer experience with increased value. Be specific and comprehensive.
This elevates the subscription model from a new way to buy to a better way to buy, presenting extraordinary value for potential customers.
For example, is the greatest value the promise of continuous access to the newest version of your software? Or an opportunity to discover amazing new products in a certain category, as is often the appeal of subscription boxes? If the value continually outweighs the cost in the mind of the subscriber, you’ll forge a mutually beneficial, long-term relationship.
Customers won’t experience any of the value of subscriptions if service delivery is disrupted. That’s why the key for any company looking to capitalise on subscriptions is maintaining the IT and ecommerce infrastructure necessary to support a subscription strategy. Without robust solutions backing subscription offerings, brands can quickly lose consumer trust. Disruptions in payment processing, for example, eliminate the convenience factor the model is based on. Delivery and other logistics must also be carried out flawlessly to maintain the passive relationship that helps ensure customer retention. By developing and maintaining strong ecommerce channels and digital payment processing systems, brands can increase subscription offerings and reap the benefits inherent in the model.
Subscriptions can be a win for both brands and consumers, but the onus is on companies to communicate those benefits to customers. By tailoring subscription offerings to meet consumer needs, articulating that value to customers, and then backing those offerings with strong IT systems, brands can leverage the subscription model for long-term financial success.
What other benefits of subscriptions should companies be communicating to their customers? Let me know what you think.