By Nkiru Asika
We used to think of subscriptions as mostly for newspapers and magazines, but today you can subscribe to get makeup from Birchbox, mental health counseling from Talkspace, entrepreneurial wisdom from Mixergy, or even a coffee subscription from Burger King. Subscription-based companies have become increasingly competitive as more companies are introducing subscription-based models into their traditional businesses or launching new subscription-only services.
From software to healthcare, e-commerce to education, insurance to entertainment, almost every industry is embracing subscriptions. The Subscription Economy Index shows that subscription-based businesses are growing five times faster than the S&P 500 and five times faster than U.S. retail sales.
Driving this growth are a number of factors including:
- Ongoing consumer shift from ownership to access—we’re just not that into owning stuff anymore
- Dynamic development of cloud computing and networked devices
- Continued expansion of mobile technology
New rules apply
Viewing a subscription business through the lens of a traditional business doesn’t work. The recurring revenue model of a subscription business affects everything from packaging and pricing to billings, operations, and more. And when it comes to marketing, bringing the same old, same old to the subscription game will cause you problems.
A paying subscriber (or member) is different from a regular customer and has a unique relationship with your business. Here are seven key reasons why marketing to subscribers requires a different approach:
1. This is an ongoing relationship, not a one-time thing
Some people think of subscriptions as simply a series of repeat purchases. However, in a subscription business, the initial sign-up kicks off an ongoing relationship, which then needs to grow in both depth and quality for the business to thrive. Successful subscription companies continuously nurture and engage their customers to keep them committed to the relationship. This is their only path to profitability.
In her book Subscription Marketing, author Anne Janzer points out that subscribers need a different kind of convincing. Since they are signing up for an ongoing relationship, they need to trust a company beyond the level required by a regular customer.
A one-time customer just needs to believe in your product, but a subscriber needs to believe in your entire business—your values, your purpose, and your long-term viability. Gaining subscriber trust and eventual loyalty is how you convince them to renew, to refer, and to upsell to higher-priced services.
Marketing’s role is to nurture value and sustain that trust; this also requires cooperation among other areas of the business, including customer support and sales. According to Janzer, “Marketing creates the promise. The whole business fulfills it.”
2. Customer first is not just a slogan
Many companies tout “customer first” slogans that don’t amount to much. But for a subscription business, customer first should be a solemn oath. If you don’t develop a long-term relationship with your subscribers, then it’s sayonara, baby.
Subscription marketing goes beyond promoting your product’s fancy features or even how your service will improve your customers’ lives. As membership marketing expert Robert Skrob points out in his book Retention Point, it’s harder to recruit members or subscribers than to win customers because nobody actually wants a subscription. We would rather get the solution to our problems or the full benefit of whatever service we are buying immediately, not spread out over 12 easy payments of $29.99.