About a 2 min. read
Subscriptions have become the norm. Beyond the expected streaming services, there are a range of products that are now available as subscriptions, including meal prep delivery, razor blades, and even jerky to name a few. Subscription services have really shifted from a novelty to a mature category. In fact, even Taco Bell is getting in on the action. As brands grow and evolve, here are a few thoughts to consider as they seek to enter in this space:
Find the “white space”
As some of these categories are getting increasingly crowded with competitors, brands need to move past the low hanging fruit category-based benefits (e.g., convenience, savings) and find “white space” that is also competitively distinct. When cost savings is a category driver, there is a risk when competitors enter to have a “race to the bottom” with price cut after price cut…with service and quality then suffering…and everyone losing. Brands need to identify the elements of their value prop that are both compelling and competitively distinct. For example, some brands in the subscription space distinguish themselves as “curators”—helping consumers wade through the overwhelming amount of alternatives to find the best choice for them.
Retention is the new growth
What got people in the door (ex: cost savings) may not be a reason they stay. With an increasingly uncertain economy, and increasingly crowded competitive spaces, consumers face hard choices in their daily lives. Brands always need to be tweaking their offering(s) and its benefits to stay relevant. For example, in the beginning of the COVID-19 pandemic, Amex Platinum successfully shifted from travel-related to adjacent benefits like streaming service savings, Uber Eats credits, etc. This kind of attention to a consumer’s shifting needs keeps customers loyal and leads to greater advocacy, which further leads to acquisition.
Make it easy
In a consumer-centric world, brands are learning how to be easy to do business with. For example, I believe Netflix actually increases loyalty by, ironically, making it easier for its members to quit. Their service is made easier by not having an annual membership and making the cancellation process as simple as a couple of clicks. In fact, if they notice you haven’t used your account for 12 months, they automatically cancel it. That’s going above and beyond. I wish my gym would do that for me and put me out of my misery.
The dynamics of COVID-19 resulted in so many changes in consumer behaviors, and brands are investing so much in identifying which ones will stay as the time goes on (and if you aren’t, you should!). Our clients find that CMB’s Habit Loops framework helps bring the above elements all together to uncover opportunities to trigger routines that support their brand, disrupt habits that don’t, and help make their brand become a part of customers’ everyday lives: automatic and hard to disrupt.
The growth rates in subscription services over the last few years may not continue at this pace, but these services aren’t going away. Brands that leverage insights to help with the issues above will be in the best position for success…although, their success does nothing to help my already crowded monthly credit card statement (taco, anyone?).