The subscription economy is booming. The recent years have seen a hundred percent growth in the industry, increasing from $57 million in sales 2011 to a massive $2.6 billion in 2016.
When the term subscription used to be all about receiving magazines each month, it has now diversified into a wide range of offerings with retail businesses allowing consumers to have flowers, meals, beauty products and more, delivered to their doorsteps.
Today, almost every sector is changing its functionality – even travel and hospitality are no exception as they, too, are witnessing the shift to the subscription economy. While this drastic change in the way we avail products and services offers maximum convenience and exclusive privileges to consumers, what does it mean to you as a business?
In this article, we’ll identify exactly what the membership economy is and offer a few tips on how you can succeed in case you decide to make the switch – which we believe you should!
The Subscription Economy
The subscription economy describes the way in which traditional pay-per-product businesses are moving toward a subscription-based business model, allowing consumers to receive products or services usually on a monthly basis for a fixed price.
Take Netflix, for instance. A monthly subscription on the platform gives you exclusive access to a plethora of TV series and movies for a cost that’s way less than purchasing a DVD. Besides the convenience it offers, it also comes with a free trial, which allows you to try new things but without great financial risks. Because monetizing long-term relationships is key to the success in the subscription model, businesses should focus more on establishing relationships and trust with their consumers rather than on the product or the transaction itself. But, how do we succeed in this completely different approach to business?
How to Make the Switch to a Subscription Model
At this point, we assume that your business doesn’t identify with the membership economy and doesn’t offer subscription services. So, what you should do is to first look at the following points:
- Product – Are your products suitable for a subscription business model? How will your consumers benefit if they subscribe to your services?
- Pricing – How much will you price your subscription fees for a specific amount of time? How will you profit from it?
- Brand Awareness – How do you want your consumers to see your business? How will you build a long-term relationship around your community?
So, how do you leverage the subscription economy? We leave you with three tips:
To succeed in the subscription economy, it’s not enough to offer a low monthly price and call it a deal. What you need is to provide your customers with products and services that are so good they will want to stick around for anything from six months to a year. It means the work doesn’t end with merely getting the deal as you need to convince your consumers to love your service in order to keep them.
Focus on Subscriber Experience
As subscribers, they want to personalise their products in a way they set up their movie list on Netflix. Hence, in order to foster a connection with them, you need to provide a personalised experience that they will not find elsewhere – and the best way to achieve this is by listening, assessing, and figuring out how to meet their changing demands.
Concentrate on Improving Your Services
Remember that subscriptions are all about relationships and offering an exceptional subscriber experience is all it takes to succeed in the competition. It requires you to go beyond the traditional form of marketing and if your product isn’t retaining subscribers, it only means that your strategies aren’t effective. So, what should you offer to make users sign up for your services month on month?
As you can see, the question here is not how you can make profit out of your business but rather how you can make your subscribers feel that they’re getting the most out of their subscription. Once you figure these out, your success in the subscription model is guaranteed.
The shift to the subscription economy is accelerating and is showing no signs of slowing down any time soon. Businesses that want to be part of the industry can benefit from the wealth of opportunities it offers from a steady cash flow to lower marketing costs, and brand loyalty to name a few.
If you’ve decided to make a shift but don’t know where to start, a digital agency in Singapore is one that you’ll need. OOm is a trusted SEM agency in Singapore that can help you raise brand awareness that is crucial for your message to be heard.
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