Is Subscription Fatigue Real?

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?Zuora, the subscription billing platform company, recently shared the results of a 13,000 person survey across 12 countries that they commissioned from Harris Poll that shows the opposite. Here's a snapshot of their findings--pulled from their summary release and below in italics:

Consumers have more subscriptions today than ever before and believe they’ll add more in the future. In fact, 71% of adults across 12 countries have subscription services, up from roughly half (53%), who had them five years ago.

• Roughly a quarter of international adults (26%) report they have three or more subscriptions compared to only 14% who had three or more 5 years ago.
• 74% of international adults believe that in the future, people will subscribe to more services and own less physical goods.
• And just two years from now, 34% of international adults believe that they will be taking advantage of more subscription services.

Product ownership is a thing of the past as adults want to declutter their lives as owning things no longer defines a person’s status.

• 68% of international adults believe that a person’s status is no longer defined by what they own.
• 70% of international adults agree that subscribing to products and services frees people from the burden of ownership (e.g., maintenance, clutter, declining value).
• 57% of international adults wish they could own less “stuff.”

Deloitte also recently came out with a Digital Media Trends report which said consumers may be entering a time of 'subscription fatigue.'

Can they both be right? I think so.

Subscriptions are definitely on the rise, and consumers continue to spend a greater share of their wallet on businesses offering access over ownership. This is both because of customer demand and because companies love the direct-to-consumer relationship and the recurring revenue that result from that pricing model.

In some cases, customers are seeking more flexible ways to access what they need without the burdens of ownership. According to Zuora, 74% of Americans value experiences over products or things.

But in other cases, companies are moving to subscription models for better valuations, more predictable cashflow and as a means of getting out from under the thumb of distributors, retailers and other intermediaries.

And while the fatigue hasn’t yet expressed itself as a decline in subscription spending, there still is a sense of fatigue. Consumers complain that there are products that can only be purchased as a subscription, and so they have to pause/cancel/restart their membership in order to get the right volume cadence. 

There is even more fatigue with digital subscriptions for content and software. Many consumers would rather just be able to buy as they go. And sometimes it’s not that the consumer doesn’t want a subscription—it’s that they have so many subscriptions, they can’t even keep track of what they’re getting, especially if the pricing is complex.

When done well, with the subscriber’s needs at heart, subscriptions can be a wonderful way to align the goals of the organization and the individual. But that is not always the case

Consumers say they want to be minimalists, but consumption is still on the rise! I think there’s a course correction though—for example, fast fashion has meant you could buy clothes so cheaply that they are almost disposable, and the quality is poor. Additionally, there’s so much garbage and we’re increasingly aware of the value of reduce/reuse/recycle. Subscribing to access shared assets both allows consumers to use better quality products with greater variety and to feel good about creating less waste.

Consumers are getting savvier about the waste inherent in stored value of capital expenditures—the car sitting in the parking lot all day, the empty vacation house, the camera equipment in the closet quietly but rapidly depreciating. And anyone who has “inherited” their parents junk swears they’re not going to burden the next generation with multiple sets of “heirloom” china or collectibles.

Economics can be better when the customer has choices about how to pay, but not always. There are still cases where customers want to own something.

A great question for today’s Family Feud game show might be “name something you don’t want to share” (top answer: underwear, but maybe also my car if keep a lot of stuff in it and have fitted carseats—anything super personal, or customimzed…)

Bottom line, the subscription economy is prompting companies to rethink the source of value for customers, becoming less "product centric" and to repackage that value in better ways. When it's done right, it gives consumers more choice. And while choice can be exhausting, most of us wouldn't give it up for anything.

About Robbie Kellman Baxter

Robbie is the founder of Peninsula Strategies LLC, author of The Membership Economy, and the Instructor for 10 LinkedIn Learning courses including: Create a Membership-Based Business and B?ecome an Entrepreneur Inside the Company. Her clients have included large organizations like Netflix, SurveyMonkey, and the National Restaurant Association, as well as smaller venture-backed start-ups. Over the course of her career, Robbie has worked in or consulted with clients in more than 20 industries.

As a public speaker, Robbie has presented to thousands of people in corporations, associations, and universities. She has an AB from Harvard College and an MBA from the Stanford Graduate School of Business. Find Robbie on Twitter, @robbiebax

#membership #subscription #churn #loyalty #premiumloyalty #stores #subscriptionbox #businessmodel

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