Building Subscription Models People Want to Keep


Subscription services are everywhere. 

The number of service and product companies offering subscriptions has grown exponentially throughout the pandemic and there is no sign of slowing down. They provide a win-win solution for customers and companies: customers have a need for convenience and companies have a need for passive regular revenue.

Big Village believes the subscription market is ripe for innovation for two reasons: 

1. The category is still evolving and remains highly fragmented.

Given its rapid growth, the category is not well defined and won’t have a clear category segmentation for some time. This is a benefit for innovation as the underlying emotions and use cases customers are now creating provides white space territories that can be actioned when marketers and product developers look beyond the boundaries of their own categories.

2. The category has plenty of barriers and pain points to overcome.

Innovation will fail without solving real customer pain. There are pain points across the broader subscription category, as well within existing subscriptions. Looking at the pain points within the customer journey for existing subscriptions, alongside identifying white space opportunities in the evolving subscriptions category will accelerate growth of any brand.

There is a need for subscriptions and the business model is not going away. Companies need to rethink how customers define value, relevancy and convenience as these needs change over time. The key is to find the insights that bring all three needs together from a customer perspective in this $1.5 trillion category.

How Many Subscriptions are too Many? 

Subscriptions are now being leveraged for different types of customer category needs, including food, entertainment, clothing, fitness and even self-care. About 70% of customers have between 2-5 categories of subscriptions services across a wide range of products. The largest shares of subscriptions are driven by entertainment (74%), mobile phones (58%) and music (44%), followed by food delivery (25%). Customers are actively cancelling subscriptions, with 34% indicating they have cancelled a subscription in the past 3 months and unsurprisingly, the top cancellations align with the top subscription categories.

Big Village is finding that many companies are not looking at the business risk of customers having too many subscriptions. The subscription model is the one tool in a company’s strategy that can develop or tap into habitual behavior to provide regular passive revenue once someone subscribes. As a result, many businesses have developed strategic plans for building more subscription use cases through category expansion. The end goal is to enhance retention and capture a bigger share of wallet. This is why we see new subscriptions launched almost every week.

At Big Village we know more is not necessarily better, and a focused strategy will lead to stronger brands and better revenue. The top important factors in customers subscribing are value for money (62%) followed by having relevant content (59%) and products (57%). The best way to keep customers interested is to focus on specific relevant content and products among key subscriber segments to drive retention and not just become another Amazon.

Redefining the Subscription Market 

Designing subscriptions for customer needs is part of the uphill battle to retain a subscription base among a large competitive set. Customers no longer distinguish between different types of subscriptions.



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