Don’t let them lose that loving feeling
A steady income stream has never been so vital. So finding and retaining customers has never been so important.
Before COVID, subscription and streaming models were already on the rise, disrupting markets such as entertainment (Spotify, Netflix), beauty (e.g. Beauty Pie, Birch Box) food (e.g. Hello Fresh, Graze, Odd Box) to name just a few.
And in the COVID context, the brands doing well in this space were the ones nailing the subscriber experience in exactly the right way.
But as belts tighten and worries about ‘the future’ translate to buying habits, how can this be protected?
If you’re a business that has a subscription or streaming service, or if you plan to ‘pivot’ in this direction, what are the key things to do, or avoid, to succeed? And what principles can be applied to building consumer loyalty, whatever your business?
Learnings
We recently worked with a heritage consumer subscription service brand that was experiencing rising cancellations in a context of increasing competition from disruptive brands and growing free content that rivalled its service.
When looking at the reasons behind the decline, it was useful to think in terms of the ‘return on subscription value’. What they get back for what they pay. This helped us understand what drove loyalty or cancellation.
This value judgement was based on three broad themes.
- The relevance of the content provided,
- The cost and perception of monetary value, regularly compared to other similar or adjacent services
- The relationship with the brand, how the service was delivered and the personalisation
We developed the model below to simplify what we found:
Relevance is critical and the main driver of cancellations.
People might say it’s about money and cost when asked but picking through that we found the underlying cause is often about relevance.
When content fails to connect with needs, lifestyles, challenges, aspirations or when people fail to see themselves reflected ‘in it’, the argument for spending their money fails. The financial commitment becomes a cost burden, rather than investment
The main challenge here is ensuring the proposition fits seamlessly into people’s lives and reflects a reality they relate to or want to achieve.
It makes life better, easier, more enjoyable or makes them feel better about who they are, and the life they are living. It solves problems or it adds ‘newness’ (new things to know, explore, do, share, experience).
When people cancel a service due to content relevance it tends to be because they feel:
- “It’s not right for me because of my personal life context”: it hasn’t evolved with them, it doesn’t fit their life now. They don’t see themselves in your content or brand. It’s not easy, essential, speaking to their needs and desires. The relationship has failed. Or,
- “It’s not right for me because I don’t need it any more” it’s not interesting, fresh, unique, or high enough quality. It’s possible to find elsewhere: better quality, more easily or cheaply. It spoke to a one-time need, it’s not diverse enough to apply holistically across life. It’s easily forgotten and not anticipated. It fails to stand out.
But let’s be real, cost does matter and will increasingly be a driver of cancellations. The main challenge in making cost palatable and justified is to enable control and provide transparency. It’s about flexibility, providing options to make it accessible, and justifiable. It’s about knowing what to expect, when and why.
A few learnings we’ve seen to help give people control over cost and protect spend include:
- Pick ‘n’ mix: people don’t always need full access to all content or products, or may not necessarily want a permanent subscription. Letting people change, tailor and adapt the offer over time will help it fit their need and resources
- Manage expectations: rising costs or unexpected charges are never popular. Be clear on sign-up charges or offer rates vs. ongoing bills. Be clear if charges rise, when and importantly, explain why. Help them manage if this happens with options.
- The ROI: show what you are saving them or uniquely bringing to them. How is their spend with you an investment in them, not you? Which links with…
- People shop around. Ensure costs are in line with the immediate and adjacent competition or be clear on how you justify a higher cost. What extra does your service or product do, offer, support, solve?
When the relationship and sense of close, human contact with the brand fails, service cancellation can quickly follow. As in any relationship, the building blocks to making them last include:
- Communication: regularly keep in touch and keep close at hand. Invite a two-way discourse with them, not a broadcast to all. Invite their feedback, get them talking to you, so they…
- Feel known, understood and personally valued. Know their needs and moods before they do!
- Feel commonality: a shared sense of priorities, values, interests and context. Ensure they see themselves in the content you create and you know your role in their life.
Cutting across these learnings is the fundamental theme of closeness.
The need to be fully attuned and sensitive to consumer needs, how they change, their lifestyle and context. Remaining connected to this ensures the relationship remains essential, and not disconnected.
This is just the beginning. A framework to help you make your subscriptions stickier. The next step is to see how it plays out with your customers. To see how well you’re delivering and where the opportunities are to create more valuable long-term relationships.
This is where we can help. Drop us a line to find out how we can help you make your subscription service as sticky as possible.