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One of Customer Expo 2018’s workshop sessions featured a presentation from two Lenati representatives: Antje Helfrich, Senior Manager, and Rick Perkins, Marketing Strategy Manager. Their brand specializes in loyalty strategies and their talk focused on digital-engagement strategies for subscription-based services.
Helfrich contextualized the challenges facing subscription-based brands. She said, “You might have a gym membership, a mobile phone plan, cable TV, etc., etc. The model of acquiring customers and then incentivizing them through a great product, a great service, or great content to get them to pay you a recurring fee—that’s nothing new. What is new is the proliferation of subscription services across all industries.” The business model has never been more popular; it is now a part of the way many consumers listen to music, watch movies, and so much more.
As Helfrich said, “Access is the new ownership. Experience is the new ‘stuff.’” The paradigm has shifted. She indicated that the subscription model tests especially well with the millennial demographic. Subscriptions eliminate the “hassle” element of shopping and selecting goods. Much of their appeal lies in the ability to offer consumers “something new,” or something they enjoy but didn’t know they wanted.
For companies, one of the benefits of subscription services is the wealth of data they present. “In a subscription service, all your customers are known to you. They are no longer anonymous. Transactions are not one-off.” As in all industries, more data on the customer means the ability to offer more personalized experiences, which in turn breed customer loyalty.
However, Helfrich points out that “personalization is not easy.” Many services entice new customers with discounted trial periods, but when these expire, customers with high expectations are likely to ditch the service if it does not seem relevant to them. Brands must analyze data carefully.
Perkins also asserted the need for data acquisition. He said, “As a really broad average, organizations have about 95 percent of their data untapped, while 39 percent of marketers think that their data collection is too infrequent and not surfaced at the right time to inform a smart customer journey.” To address this challenge, Perkins recommended better organizational alignment throughout companies.
“The companies that are really doing this right,” said Perkins, “are changing their core product.” He mentioned Spotify as an example, as the service now has the “Discover Weekly” feature which regularly invites customers to a personalized experience. The feature is deeply embedded into the app, making it a substantive change to the Spotify service and experience.
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