A major change is afoot in the way people are spending; they are moving away from one-time buying, toward subscribing to services. For marketers, that shift opens the door to a new set of revenue opportunities, but it also means some fundamental changes in how they market.
What began with Netflix and Zipcar is now moving across billion-dollar industries, including communications, entertainment, publishing, and more. Industry research analyst firm Gartner predicts that by 2015 35% of Global 2000 companies will generate revenue via subscription-based services and revenue models.
But making the shift with your business requires more than slapping a "Subscribe" button where your "Buy Now!" button is, because it's a fundamental change in the way we as marketers approach entire markets and how we launch, price, and package products.
Marketers should pay attention to how the industry is changing around them, lest they get left behind. Here are five keys to better understanding how the Subscription Economy is changing the ways marketers need to think and behave.
1. Focus not on products but on people
A marketer's success was once determined by how many products a business shipped, or how much revenue was generated from a one-time sales transaction. Marketers were rewarded for gains in market share, however brief, even at the cost of ever-thinning margins. But with subscription services, such metrics are obsolete.
Instead of focusing on products, units shipped, and annual profits, marketers in the subscription economy should care about one thing: how many customers they reach and retain.
Customers are the lifeblood of a subscription business, and retaining their loyalty is much more important for success than a single, large purchase. The goal of the Subscription Economy is to shift beyond the 20th century discrete, fleeting transaction-based relationship to an ongoing servicing of a community of loyal customers.
Take the first step (it's free).
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