The Subscription Economy Shake-Up: 3 Strategic Steps to Get Ahead

Consumers have taken the rulebook on brand and consumer relationships around subscriptions and thrown it out of the window – and I say good for them. It’s about time.

It’s a conversation that (hopefully) every Board is already having, but for added perspective, I recently contributed to a Minna Technologies report in partnership with FT Strategies and the global market research firm Savanta, that looked at the Subscription Economy across consumer goods, media and financial technology.

The report brought together a wealth of fresh data-backed market insights and analysis of the key trends shaping the subscription economy right now and over the coming years, with some interesting findings and commentary from subject matter experts.

These findings show that:

• 59% of UK consumers and 55% of US consumers know exactly how much they’re spending on subscriptions.
• 50% of consumers say that subscriptions enable them to access products, services and a lifestyle that they otherwise would not have.
• 25- to 35-year-olds have the most subscriptions, with 22% having seven or more.
• Almost seven in ten (68%) of the 50 leading subscription businesses we surveyed say that retention is their ‘top strategic priority’.
• However, one in four providers (26%) say that the main reason for customer cancellations is ‘switching to a competitor’s product’.

Consumers have now positioned themselves at the core of the model. They are much more comfortable with the idea of subscribing – they know how to sign up and how to cancel; they understand the utility, but their expectations are also correspondingly high. Whereas during COVID the value proposition revolved around convenience and access, during the cost-of-living crisis the proposition must demonstrate value for money.

They are less patient when it comes to poor experiences that aren’t efficient, relevant or personalised, and will switch to another brand before you have a chance to think about how to make it up to them. It’s a wrong step that no brand can afford to take anymore. Not even once. ?Gen Z, especially, wants self-service, proactive transparency, community and values, hyper-personalisation, an omnichannel approach, engagement on their own terms, wherever they choose, and constant growth and improvement based on their feedback.

In the report, we talked about the subscription model in detail, and the strategic steps that every business needs to take, in line with three consumer wants:

1. Invest in an ‘all in one’ subscription management solution.

74% of subscription customers expressed this interest. The cost-of-living-crisis is putting increased pressure on consumers, and they’re understandably less willing to part with their time and money unless they are really seeing true value from a brand that they feel is simply making their life better. They want ease and consolidation centred around their needs and expect a convenient ‘all in one’ experience rather than individual experiences on brands’ own platforms.

2. Focus on individuality and community.

Targeting by age in marketing, sales and retention strategies is no longer an effective approach. It’s just too simplistic, and a waste of valuable data you (should) have at your fingertips. Subscription providers instead need to focus on tailoring communications and propositions based on in-depth, narrower demographics and consumption behaviour. I’ve said it time and time again: it’s all in the data.

People want to engage with brands who embrace individuality and community and are authentic and transparent about their values and contributions to the community. We’re seeing the dawn of the ‘Influencer 3.0’ era, with consumers looking for longer-term relationships with trusted sources of information and thought leadership. Think about how to incorporate experiential components into subscription offerings, including events and increasing levels of one-to-one interaction with certain influencers.

3. Facilitate a transition from ownership to access through a focus on personalisation and experience.

There is no ‘one size fits all’ solution. Leverage customer insights, engagement and feedback at every touchpoint to create a meticulously planned and executed (and constantly evolving) user-centric experience – an experience that is optimised and personalised for every customer. Would augmenting capabilities by partnering with technology providers and fintech services enhance this experience? Go beyond self-promotion and use customer stories to build a community around your brand. A compelling brand experience has the power to not only attract and retain new customers but entice ‘lost’ ones back to your brand.

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This new subscription universe – with the customer at its centre – poses challenges for many subscription brands comfortable in their current ways of being more product-led and less experience-led. However, this is an opportunity for businesses and their Boards to learn how to become more relevant than ever before.

It requires collaboration, on a global level, between innovative products and services, financial services, fintech and payment providers, all supporting the subscription infrastructure and transactions. It’s a new world.

Check out the full report here, and get in touch if you’d like to gain some clarity and discuss the next steps in your own subscription journey.

Written by Gabrielle Hase.

CEO of?Soleberry Advisory?and digital Non-Executive Director. I want to help solve the problem of the lack of appropriate female and digital skills and perspectives at the board table.?

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