Subscription services

In 2020 when the world began panic buying toilet paper, our household wondered what all the fuss was about.

Our quarterly delivery of mixed paper products – tissues, toilet paper and paper towels, had just arrived and been stored in the laundry cupboard.  We’ve subscribed to this service (products are made from bamboo and recycled sugar cane with limited packaging) for some years and have found it reliable, flexible and – importantly – we never run out because someone has forgotten to add these regularly used items to the shopping list.

In the past, subscriptions – where you pay a recurring amount at regular intervals for your chosen product or service – were used for publications, gym memberships and not much else.  Some were annual, like a magazine subscription, others monthly or quarterly.  Then came subscription television services, and, as the internet developed, on-demand streaming services started up followed by meal delivery boxes and now the subscription model is being used to sell – and purchase – a wide range of products and services.

Since early 2020, Covid lockdowns and working from home have driven a rise in such services and the article Innovative Subscription Services: Turning a Crisis into a Win looks at how and why the subscription industry took off during lockdowns.

These days you can also arrange for flowers or potplants, coffee, health and beauty products, alcohol, cheese and clothing to be delivered to your door on a weekly, monthly or quarterly cycle.

For a consumer, in a busy world, it’s convenient to have things delivered without leaving home, and for retailers the move into e-commerce has been driven by necessity.  A subscription service, for some, is the basis of their entire business, while for others it’s an addition to their retail models.

For a business, a subscription model allows for less uncertainty and ensures a regulated income stream which in turn assists planning.

The Foliage Studio in Ngaio offers a tiered subscription model for houseplants.  Director Cam says that offering a subscription service “… helps with planning regarding stock and cashflow.”  When setting up the subscription model, used to share the love of houseplants, research went in to what would work best.  Amongst the considerations were the need to offer a variety of products, ensure enough products were in the supply chain, whether the cost of subscriptions covered product costs and also consideration of shipping, packaging and associated costs.  The original model proved a successful formula although “minor tweaks” were made to “delivery schedules and secure packaging options”.  Ongoing benefits to business has been increased exposure to the service from satisfied customers along with a noticeable  increase in store visits.

If, as a business, you are thinking of developing a subscription service, or adding one to your offerings, here’s a reading list to help you decide what may be best.

Not sure if this is the right approach for you?  Then Subscription Model? Is This Really The Best Approach for Me? might be a helpful read.

How Subscription Services Work & Why You Should Use Them claims Subscription services are one of the best things you can do for your ecommerce site and briefly outlines seven reasons for adopting a subscription model.

Another article 6 Most Popular Subscription Services [+Tools They Use to Drive Growth] gives examples of  nine companies it considers to be offering successful models.

Done your research and ready to give it a go?  Have a look at How to start a subscription business : A 2023 guide

If it’s ideas you’re wanting here’s some subscription service ideas that you could either add to an existing business or start up : 53 subscription box gift ideas for every interest and hobby and  The 67 Best Subscription Boxes to Gift for Every Interest

Be aware though that The rising power of subscription services warns :
Adding a subscription service into a new DTC offering is a great strategy, although giving customers the ability to auto-replenish won’t just sell itself. Businesses need to understand their new B2C customers and develop a mutually value-driven relationship.

The Harvard Business Review considers the psychology behind subscription services and looks at some of the main reasons why they fail.

via GIPHY

For more in-depth reading try these two offerings from the Wellington City Library collection.

The automatic customer : creating a subscription business in any industry / Warrillow, John
“How smart companies can use subscriptions to win customers, increase cash flow, and ignite growth What do Zipcar, Netflix, and WhatsApp have in common? They are pioneers of the new subscription economy in which people pay automatically for much more than publications. John Warrillow, the acclaimed author of Built to Sell, offers a blueprint for winning subscribers for any kind of business. He explains, for instance, – The nine different subscription models and how to apply each in your business. – How Dollar Shave Club turned shaving into a subscription. – The secret psychology of selling a subscription. – The eight reasons why customers stop subscribing. Whether business owners want to transform their entire model into a recurring revenue engine or just pick up an extra 5 percent of automatic sales, they will find great insights and examples in Warrillow’s book”– Provided by publisher.” (Catalogue)

Subscribed : why the subscription model will be your company’s future – and what to do about it / Tzuo, Tien
“Companies like Netflix, Spotify, and Salesforce are just the tip of the iceberg for the subscription model. The real transformation–and the real opportunity–is just beginning”– Provided by publisher.” (Catalogue)

 

 

The membership economy : find your superusers, master the forever transaction, and build recurring revenue / Baxter, Robbie Kellman
“The membership business models of Netflix, ZipCar, and other industry giants revealed–and how you can use them to lead your company to the top of the food chain For decades, consumers and businesses have joined clubs, bought products and accessed services using a subscription model. But it has only been in recent years that the model has been perfected. Join Today shows how nimble companies that have developed a Membership Model are thriving. Companies including those that rent, lend or offer unlimited or premium access instead of just ownership, have the opportunity to leapfrog industry leaders. In terms of strategic business models, this is one that allows for breakthrough growth. The book also explores how industry leaders like AmEx, Uber, Weight Watchers, and Salesforce.com are radically rethinking how they provide value to their customers.” (Catalogue)

If you need more information please contact the Prosearch team at the library.  We can help you find information across a range of perspectives and resources.  All enquiries are treated in confidence.