With the COVID-19 pandemic, our lives are increasingly evolving towards digital services or combined products of such services. Consumers are looking for feasible ways to opt for flexible and scalable bundled product offerings. Consumers should have the right to choose where, how and how much they consume and pay for the same. This is creating a shift toward subscription business models across every industry. With the huge impact of COVID-19 on global businesses and the global economy, this shift will accelerate the flexibility of requirements. Subscriptions will be the easy approach to streamline business operations and maintain the ‘order to quote to cash’ process flow.
The growth rate for subscription in digital news and media grew by 110% in March to May, 2020 compared to the previous 12 months, as a result of increased consumer interest in news updates.
How to Drive Subscriptions
Pricing is one of the most valuable tools in the subscription economy and must align with your consumer needs and values. As a subscription service provider, we need to understand subscribers’ habits by building the first basic model of pricing and segment that offers services or products. The next step will be iterating these subscription services eventually over time. Another important point where we can provide better services to subscribers will be upsell or cross sell the product offers during surges in demand. As a subscription provider, we need to understand the consumer habits in terms of payment and its frequency. This is where customer segmentation plays a key role in understanding the product and billing frequency. This will help us target the right customers and help them make the right choices.
Moving your Customer to Subscription
Shifting to the subscription model is not easy. The subscription provider needs to meet customer demands while meeting business goals. Effective communication plays a key role in helping subscribers understand what is offered, free trial, sign up gift or discounting and so on. In addition, value adding some products to be more consistent is helpful. Customers need to be given the control to engage with the brand of their choice and ensure that they feel in control of their experiences. This is achievable through several channels - self-service or any other way of offering services.
The slowdown in business in 2020 has only increased the competition among subscription-based businesses and driven non-subscription companies to transform to meet new consumer demands for services. Retaining and growing active subscribers is core to succeeding in any economic climate and in the case of a downturn, will add a layer of urgency to mitigating and reducing churn.
Therefore, subscription businesses including traditional retailers, e-commerce giants, tech companies, or high-end manufacturers will have to start using data to customize and enhance their products. This will enable them to have a better understanding of the customer and have a stronger market outlook. This is in turn will create competition ready businesses which can sustain themselves in the subscription service economy