Everywhere you look, businesses are racing to introduce some form of subscription service for their customers. Streaming has taken over television, Software as a Service (SaaS) has taken over the digital space, video games are adopting Games as a Service model, and even media outlets are turning to subscription models to help fund their journalistic efforts.
According to the Subscription Economy Index, the subscription economy has grown over 400% over the past nine years. This rise is expected to continue as the world transforms into a fully digital society.
As more and more of the world's biggest companies switch to some form of subscription model, smaller businesses have the chance to learn from their successes and mistakes.
4 things to learn from the best subscription commerce businesses
It's not about ownership anymore — it's about access
Video and audio streaming platforms have taught us a fascinating lesson — customers aren’t phased by not “owning” a product, especially digital products.
Time was, you would go down to the store, buy a DVD and own that DVD for life (or at least until you gave it to a charity shop). Now, consumers can pay the same price as a DVD per month and have instant access to thousands of titles.
While streaming has caused headaches for the entertainment industry, there is a tremendous amount of evidence that customers prefer subscription services. It gives them access to luxuries at a fraction of the cost and makes it easier for consumers to enjoy the content they want.
The best way to take advantage of this willingness to give up ownership in favour of convenience is to listen to what your customers want. There’s little use in packing your subscription service with features if no one is using them. Give them more, but give them value at the same time.
Keep it simple
Complex UX is a surefire way to lose all of your customers. Nobody wants to go through sub-menu after sub-menu to find what they want. In this Amazon Prime get-everything-instantly world, consumers simply want to open a program and immediately see what they want.
Let’s pretend we’re back in 2002 for a moment. To watch one of the latest movies, we would need to venture outside (I know, scary) and find a video store. Once we’re in the store, we need to walk around browsing until we stumble across the video we want to watch. Then you have to head back up, pop the tape into the VCR, and you’re finally ready to watch the movie. That’s assuming you haven’t rented the title, which will mean repeating the process the next day to return the tape.
Then Netflix had an idea; what if you didn’t have to do any of that? What if you could just sit on your sofa and watch whatever you want to watch within minutes? Enter streaming.
Now, you can watch almost anything you want on any device for a tiny monthly fee. TV shows will play every single episode without you needing to get up and change a disc, and if you’re struggling to think about what to watch, the algorithm will suggest new content based on your previous viewing. It’s so simple even your grandparents could use it!
The easier you make it for people to use your service, the more they'll use it. And if you use things like recommendation algorithms that can help improve their user experience, they're more likely to spend more time with your service.
Increase the lifetime value of your service
It can be simple to lure customers in, but you need them to stick around to make a profit. To do this, you must bake value into every single part of your service.
Using algorithms to recommend new content to your users is one of the best ways to ensure they use the platform for longer. Think about Spotify. They have perfected the music streaming platform, with only Apple coming close to genuinely competing with them.
This is because Spotify focused its platform around the user and what they want. Users can make and share their own playlists, save songs and albums they love, follow artists and be notified as soon as new music hits the platform. These basic features draw users in, but what keeps them is the ability to discover new music.
Spotify will autoplay “radio stations” based on the song or album you have listened to, packing it with similar artists to help users find something new. They also have automatically generated playlists based on your most listened-to tracks, genres, mood, and even occasions. Plus, a “release radar” playlist automatically updates weekly to show you the newest music from the bands you already follow.
This value keeps customers returning, and subscribers tend to stick around for a long time. By offering real value to your customers, you can achieve the same.
Offer something new
But, “something new” doesn’t always mean a completely new offering. Take Apple, for example. They have a hefty range of subscription services, including Apple TV+, Apple Music, Apple Arcade, Apple News, etc. Due to the success of these services, Apple saw the opportunity to make things easier for consumers by allowing them to bundle everything into one subscription, Apple One. This has helped Apple get customers to use their lesser-used or newer services while still offering the same great value the company is known for.
Subscription commerce is the future of digital commerce
It’s clear that businesses need to adapt to subscription commerce sooner rather than later. That’s where we come in! Limio is a startup in London that specialises in subscription commerce and is uniquely devoted to delivering best-in-class capabilitie. We build software that helps businesses sell their subscription products on and offline, with customer experiences to rival the best. If your business wants to get started in the world of subscription commerce, contact us today to find out how easy we can make it!