This is the final part of our blog series looking at some of the top-of-mind issues within the subscription economy; Part 1 Why consumers love subscriptions, highlighted the top features that make up a great personalised eShopping experience, and Part 2 What makes the subscription shift difficult, we discussed the challenges of churn rates and what new KPIs can be tracked in order to monitor subscription performance against overall business growth strategies. Now, we turn our attention to ways that managers can start exploring subscriptions and how they can understand the areas that must drive the change in order to adopt a subscription mindset.
Part 3 – How to start exploring subscriptions
As a first step, managers must adopt a subscription mindset, they must put the consumer experience first in everything they do, analysing the core consumer needs and meeting these in the most effective and efficient way. This is the cornerstone of the subscription economy if businesses are to ensure continued success in their industries.
Moreover, managers should be prepared that transformation is a timely process and business results will only start to show after a period of time, therefore, patience and perseverance are important characteristics to have as part of the mindset needed to drive the change.
Understanding the areas of change
Shifting to a subscription offering will require major key areas of transformation throughout businesses, management must embrace and champion the changes, both physical and mindset:
- Technology – New software tools are essential for subscription business models. CRM and ERP systems were designed for traditional product purchases and do not possess the level of control required for the subscriber lifecycle.
- Subscriber Data – As with the old technology systems, the basic customer data records of name, address and email will now be insufficient. Remember, long-term relationship and consumer experience is key here, and the subscriber identity records need to act as the fingerprint of each customer, including: detailed purchase, payment and refund history; local pricing and promotions; renewals; product swaps and much more.
- Subscriber Journey – This is where companies can start to work on personalising the consumer’s experience and building that all important long-term relationship using customised offers, upgrades, events and value-added services, etc.
- Subscriber Culture – Everything about the business, every single person and every single process that is involved in the subscription experience must be wholly focussed on the subscriber relationship – the culture has to go beyond seeing customers as simply traditional customers – and, of course, consumer needs are never stagnant, businesses must adapt and anticipate the evolving needs of subscribers to stay ahead in the marketplace.
As we’ve seen throughout this blog series, the subscription model is a complex and demanding one, it is obvious to see that the subscription economy requires a completely different approach to business growth. As Tien Tzuo aptly states, “customers are absolutely key in this relationship and rather than putting the focus of the business on the “product” or the “transaction,” subscription economy companies live and die by their ability to focus on the customer. Now, the formula for growth is focused on monetizing long-term relationships rather than shipping products.”
We cannot deny the importance of the subscription economy and its effect on the business of tomorrow. To end on a few more words from Tien Tzuo, creator of the term ‘The Subscription Economy’: “If you’re not shifting to this business model now, chances are that in a few years you might not have any business left to shift.”
This article was created and written by Luigi Matrone – CEO & Founder of the eBusiness Institute.
At the eBusiness Institute, we have extensive experience of working with numerous brands on their digital transformation. We understand the importance of an optimised consumer experience to drive your brand’s sales online and offline. Contact us to learn more about how we can help you.