Last modified: December 14, 2017
Being disruptive isn’t new to the snowboard industry. From its founding, the sport has prided itself on pushing limits. One of the next great disruptions to the sport is being led by Signal Snowboards, a snowboard factory located in the notably un-snowy Southern California. Following in the footsteps of companies in countless other industries — ranging from luxury cars to diapers — Signal Snowboards recently transitioned to an online subscription business model.
Referred to by Fast Company as “the Netflix of snowboarding” and promoted as “the best way to buy a snowboard ever,” for $35-$55 per month, members receive a new snowboard each year directly from the Signal factory.
At first glance, consumers may question whether this is truly an improvement over buying a board outright, which starting at $399 is less expensive. However, it is yet another example of the evolution of online commerce to move from one-and-done product purchases to a service-oriented business that builds loyalty by developing ongoing relationships with consumers.
Adding Value Beyond the Board
Taking a page from Amazon Prime’s playbook, Signal’s subscription offering includes a variety of benefits for members. In addition to receiving a new snowboard each season, subscribers get a full-coverage warranty and access to the Members Only Demo (MOD) program, which includes two one-week demos each year at no extra cost.
Given the price point and “normal” snowboard buying experience, where a customer buys and hopes they like the board, this programs builds value by protecting against buyer’s remorse. It lowers common barriers to entry for trying the sport, while encouraging engagement with the latest products.
Smartly, Signal is already experimenting with additional value-added member benefits. It sold out its first members-only trip, and as Signal founder and veteran pro-snowboarder, David Lee tells Fast Company:
We’re also building out a concierge service where, if you’re going to Park City or Snow Mass or wherever, you’ll be able to call in and our team will help you find a great restaurant, let you know our crew’s favorite runs, or whatever you need or have questions about. It’s all about making your life easier to go snowboarding.
This idea of buying a membership to a “concierge service” for snowboarders is echoed throughout Signal’s website and it’s easy to see how this concept can continue to grow as the subscription offering evolves.
Solving Business Shortcomings with Subscriptions
Like much of the outdoor sports equipment industry, snowboarding has a heavy dependence on retail as its primary selling channel, which Lee identifies as a challenge for small manufacturers.
Over the last decade, Signal has clawed and scraped for every inch of shelf space it could get in brick-and-mortar retail. â€˜I think there’s basically a ceiling for a small brand—the bigger brands own a certain percentage of the retail market, and it’s just really hard to get around that,’ says Lee.
By creating a strong direct-to-consumer channel and offering services that add value beyond what big retailers provide, Signal is not just selling products, it is building long-term relationships with customers. This helps the company get new products into customer’s hands quickly, and serves as a feedback mechanism that can be used to innovate and build more value into their subscription program over time.
Another business challenge solved by the online subscription model is lengthening the typical buying season. The highly seasonal nature of the industry means a very short window when people are typically shopping for equipment. However, as outlined in LA Weekly, the flexible nature of a subscription billing model removes these barriers.
With the spread-out payments, you’re not so nervous to buy midseason when there’s only a couple of months left,” [chief operating officer, Billy] Anderson adds. “If we’re deferring those payments, it helps to spread it out. It gets you on the hill and gets you on a new board, and then when your board is tailing out, you’re riding it through November and December when it’s a little rockier and your board is getting beat up. Then you’re ready for a new one when the snow falls.
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