Three ways to succeed in the subscription economyby
“Subscription economy.” These days, you can’t seem to escape these words. With the recent adoption of the subscription economy by Adobe, Microsoft and other industry giants as they shift from packaged software to subscription services, the subscription economy is the talk of the town. But what does a subscription economy really mean? More importantly, how does it impact your business?
Let’s start with the basics: your customer. Rather than purchase a product up-front, consumers are gravitating towards paying a periodic fee for access to a product or service. We can thank the magazine industry for this breakthrough. By offering customers the convenience of monthly issues delivered directly to their doorstep, magazines used the subscription economy to replace the need to actively go out and purchase each new issue.
Today, the subscription economy has evolved to new extremes. Forget about magazines, now you can subscribe to almost anything. Want to play with a puppy this weekend? No problem. You can rent-a-pet without committing to actually owning one. I’m serious. This past week Fortune reported that you can subscribe to ‘everything from autos to underwear.” With a subscription economy you can have your product or service when you want it, where you want it, and how you want it.
Seems great, right? While you may be wondering why everyone is hopping on the subscription bandwagon, take a minute to think about how this shift affects the way you conduct business with your customers. Without loyal customers, your company fails. Period.
The subscription economy opens a whole new world for your customers. Why? There’s less commitment, and your customer can choose to cancel a subscription at any time. Not happy with Netflix? Switch to Hulu. Competition becomes fierce as companies fight to steal each other’s customers. So, how do you stay ahead of the curve when fighting for your customers’ loyalty? I’ve helped many major technology brands maximise their recurring revenue and thrive in a subscription economy by employing three easy principles.
This principle may seem like a no-brainer. Yet, I cannot stress enough the need to communicate with customers. You must be actively communicating with your customer if you want to succeed in the subscription economy. Reach out to customers frequently, show them you care, and find out ways to improve their user experience. A happy customer is a loyal customer. Most importantly, a loyal customer renews his or her subscription. Here are a few tips to help you communicate with your customers:
- Send periodic customer newsletters. This is an excellent way to share news with customers, and keep them updated and informed. This low-cost vehicle can also serve as an effective tool for cross-sell and up-sell.
- Schedule regular check-ins. Whether by phone or email, frequent touch-points with your customers makes them feel valued and appreciated – which is priceless when it comes to retaining loyal customers. If you wait to initiate contact until a customer’s subscription or renewal is due, you’re too late.
Simply opening the line of communication with your customers isn’t enough to gain loyalty. Sure you can give an occasional check-in call, but if you’re distracted by photos of your friend’s new baby on Facebook and not really listening to the customer, what’s the point? You need to listen to customer feedback and engage, not just put on the show and dance pretending to care.
And you even don’t always need to use a telephone or email to engage. Monitor and engage your customers through social media. Social media gives customers a voice that they’ve never before had — and it’s louder than ever. Knowing how your customers feel about your product or service gives you unprecedented insight into ways to improve your relationships, while demonstrating through a very public forum that you’re listening. Social listening is growing more important by the day.
Make changes within your organisation that reflects what you’ve learned while communicating and listening to the customer. After all, why bother to communicate if you’re not going to take informed action to improve customer relationships? Are your renewals and subscriptions commensurate with the level of service received? Are your renewals and subscriptions accurate with what’s been utilised? Do changes need to be made to reflect the customer’s immediate needs?
The subscription economy is now woven into the fabric of our society and every B2C and B2B company is quickly seizing upon this new opportunity. To succeed, companies must evolve and create an “active” culture where they proactively communicate, actively listen and quickly take action. Business is no longer viewed through a yearly lens – but rather day-by-day.
How has your renewals and recurring revenue business changed to reflect the new realities of a subscription economy?