Having previously written about the principles of success in loyalty programmes, we are noticing more and more convenience consumers needs being solved by subscription services, which perhaps explains the explosion of the model in recent years. These exciting ideas have led to writing this article to help explain the “principles of subscription” that we believe are creating these opportunities in our industry. They also complement the ideas we’ve discussed before that drive customer loyalty, such as the need for clear, consistent, compelling programmes (at a minimum), that are also easy, empowering and engaging.
We were also inspired by a recent research video shared by our friends in Ipsos Denmark and their partners Subscrybe, as well as many other business organisations emerging to support the growth of this exciting business model, such as the Subscription Trade Association and the Subscription Summit conference being run for the fifth year in the United States for our fellow fans of the subscription business model.
But before we delve in to these powerful principles, our research uncovered a viral video that launched of the one world’s most famous subscription services that (to date) has had over 26 million views, and undoubtedly drove much of its incredible early success and ultimately led to the firm’s billion-dollar sale to Unilever in 2016. With a highly engaged base of advocates, the Dollar Shave Club initially achieved respect and recognition as an industry disruptor solving the global pain point of expensive razor blades, but then went on to achieve extra-ordinary loyalty and an NPS score of 64, that even iconic brands such as Apple and Costco have not managed to match.
Watch this video to see how clever use of humour, magnified by social media, helped create a powerful brand, practically overnight (the company got 12,000 orders within 48 hours of this video launching)!
With our laser focus on convenience retail, this article will explain the relevant human behavioural needs that we believe are driving adoption of subscription models in our industry. And in addition to understanding the trends driving subscriptions within the convenience sector, we also found it useful to discover the nuances and models defined by the Subscription Trade Association who have categorised the subscription commerce economy in to six segments depending on the industry, operational approach and consumer needs being met.
Human Needs – Solved with Subscription
- Replenishment: While convenience stores are clearly designed to ensure customers can always stock up on the everyday products they need, a store visit is fundamentally inconvenient and the burden is on consumers to remember to replenish. A subscription model ensures customers can look forward to a reliable supply of products they need, when they need them, and this is exactly the brilliant insight behind the Dollar Shave Club, which also addresses our need for both “value” and “convenience” no matter what channel we choose.
- Being Known: Consumers increasingly need brands they can trust, so retailers who take the time to learn what we like and recommend products tailored to our individual needs will win extraordinary trust over time. Our favourite recent example of this is the article about “Mealpal” which curates great value meals that also allow customers to “discover” new restaurants in their area, as well as the “exclusive” opportunity to “conveniently” skip the line. Again “Dollar Shave Club” does this consistently, with promises such as “we never make it hard to leave” to reassure customers that their custom is respected and valued.
- Curate: In our increasingly anxious world, busy consumers increasingly suffer from a sense of cognitive overload, so retailers who do the thinking for customers and offer tailor-made products that eliminate the need to make yet another decision are a relief for busy consumers. First described in the 2004 book entitled The Paradox of Choice, subscription services like Netflix save us time and frustration by ensuring our entertainment needs are met by a high quality, customised stream of content that we can quickly and easily enjoy with no perceived cost as the subscription package allows unlimited consumption.
- Exclusivity: As humans, our deepest need that is often hardest to achieve is simply connecting or belonging. Great brands such as Coca Cola have created subscription programmes that combine that sense of community with other brand lovers, with the opportunity to enjoy “exclusive” products that no one outside the “Club” can access. It is the same concept leading some industry commentators to conclude that all consumer goods manufacturers should in fact have a direct-to-consumer option. Clever and compelling, this concept is certainly one for the convenience industry to watch with interest – potentially for partnership opportunities in global markets.
In closing, if you’re exploring the concept of subscriptions for your business, we highly recommend this Ipsos Insights webinar and can introduce you to the speakers if you want further guidance from them on the main models to consider, as well as understanding the key drivers of change that are essential to deliver on in order for your subscription business to become truly successful.
Ipsos Insights – The Power of the Subscription-Based Business Model
Liquid Barcodes is a leading global loyalty and digital marketing technology company specialising in the convenience store and foodservice industries. Our proprietary cloud-based technology platform allow retailers to create and manage their digital marketing campaigns with a proprietary process we call the “customer connection cycle’ to engage, promote and reward customers activities in real-time across digital and media channels.
How we do it:
We have developed the most advanced loyalty and digital marketing technology platform specifically for convenience store and foodservice retailers globally.
Retailers use our self-service dashboard to create and manage loyalty driven marketing campaigns that increase purchases with their existing customers, as well as effectively target and acquire new customers through partners or paid media channels.
One core component of live loyalty is gamification. We have gamified branding, loyalty and promotions. We believe this approach is essential in order to get customers’ attention and ultimately truly engage them with repeatable actions thereby winning their loyalty.
Check out some of our exciting/proven results here:
Chief Content Officer, Liquid Barcodes and Independent Loyalty Consultant
With over twenty-five years marketing experience, I specialise in loyalty marketing consulting, managing consumer loyalty propositions, strategy and operations. In addition to working with Liquid Barcodes, my clients have included Telefonica O2 Priority, Three Mobile, Electric Ireland, Allied Irish Bank and The Entertainer Group (UAE), as well as Avios – the global points currency for some of the world’s top airlines. I am also a former judge for the Loyalty Magazine Awards and host of the “Let’s Talk Loyalty” podcast.