Today, more than ever before, companies must adopt new business models that are adapted to consumer trends. Consumer buying trends have shifted from a purchase model to a rental model. Since Relaxnews recently launched a new platform, my editorializer, along with an updated, subscription-based payment model, with a free discovery period and adaptable subscription packages. We have engaged in discussion and made a few discoveries about the subscription economy. Here, we share our findings on this new business model.
What is the Subscription Economy?
More options, less big decisions.
Why buy a beach house in a fixed location when you can rent a fully equipped house anywhere for your two-week vacation? Why buy 10 songs for the price of monthly unlimited streaming of any songs? Essentially, why pressure myself to make a purchase decision when, for an affordable and predictable monthly fee, I can keep my options open and still fulfill my needs?
While the concept of subscriptions has existed for decades, it is the unique personalization that makes the subscription model interesting to consumers today. Thanks to data collection and analysis, subscribers get an experience that is unique to their needs and interests.
This logic now applies to many fields; from products to services, people want options without an excessive level of commitment. In our example, Marketers and Communications Directors ask, “Why should I pay for an in-house journalist, with one specialty, to craft all of my content?” Our answer: you shouldn’t. Instead, get a subscription, for a fraction of the cost of a salary and benefits, that gives you access to an entire team of journalists, which is why we built my editorializer platform with a subscription model.
What should you consider before moving to the subscription model?
This week, Relaxnews headed over to Station F, the new hub for start-ups in Paris, to attend a keynote hosted by Ziqy, a start-up that develops subscription management technology. Speakers included successful entrepreneurs in the increasingly popular “box” industry (beauty boxes, food boxes, wine boxes, etc.) to innovation consultants to those working in “millennial media” companies (otherwise known as creators of highly shareable content).
The topics covered ranged from considering which subscription model is right for you to what works and what doesn’t. We boiled it down for you and share a few key takeaways below.
Here are 6 things you should know:
- There are a few key questions you should ask yourself before deciding on a subscription model.
Who are my clients? What are their problems? How can I solve the problem? If the answers to these questions don’t include profiles or solutions that require multiple transactions, samples, or ongoing service offerings, then subscription may not be the model for you.
- The client needs a discovery period. You can fulfill this need by offering tests, samples, and freemium versions of your offering.
- If you want to generate recurrent purchases, take a few tips from a hit beauty box (hint: they have over 1 million subscribers internationally).
These experts work in the balance between paid samples and an intentional purchase. Their model for monthly product subscriptions is: Ensure the best product selection. Don’t send low-quality or uninteresting samples. Put in place strong technology that allows for personalization; everything should be adapted to the client profile that is built over time. Finally, loyalty is earned through sustained performance, otherwise known as big investments in brand voice and image.
- There are a few things that you should know about subscribers in order to improve their experience.
Who are they and how can we speak to them? What is our shared journey and how can we personalize it? What is the subscriber culture? In other words, what idea do you want them to grasp as a result of your interactions?
- Don’t collect useless data. Save yourself and your user time by only asking for data that will help you guide their experience.
- Keys to getting the right users to subscribe.
Create and propose content that your audience would search for on its own. Then, ask yourself if that content is shareable. Make it as sticky as possible until it is.
Finally, as important for the subscriber economy and it is for one-time transactions, make your client feel like his or her experience was unique and they are more likely to come back. In considering your own business model, meet your clients, talk to them, and ask them for feedback; you’ll guarantee yourself increased loyalty and higher annual revenue.