From music to meals, from razor blades to flowers, you can buy just about anything you want via a subscription.
I drafted this column using my paid version of the subscription note-taking app Evernote. I have a monthly massage plan, and I watch movies on Netflix.
New business models are shifting from purchase and ownership toward sharing or subscriptions. This has and will cause dramatic change in many industries that rely on traditional purchasing scenarios.
Subscription Business Models Broadly Defined
Many consultants and technology businesses claim they invented the subscription model. But, of course, it has funded the publishing industry since the 1600s.
Here's how I define "subscription model:" paying for products or services on a recurring basis (e.g., monthly, annually) without retaining use when the contract or agreement ends.
This definition does NOT include leasing (e.g., cars) or rentals, like a chainsaw for backyard tree trimming.
These services share some general traits:
Service is the Product
The traditional purchase model focuses on the initial transaction and possibly add-ons like service or maintenance. If a customer is dissatisfied with the product or service, the company will likely lose a repeat customer, but probably still make a profit on the one-time buyer.
With the subscription model, the ongoing customer experience is paramount, giving subscribers much more power than the transactional buyer. If the value doesn't meet expectations – online services go down, massages disappoint, the dinner-in-a-box fails – users cancel their services, and the recurring payments end.
7 Roles for Email Marketing
Below are seven key areas where email marketing can help convert and retain more subscription customers:
1. Acquisition: Content-based emails can educate and build brand trust and help convert prospects into customers.
2. Onboard: Meal or floral services might be unfamiliar to many potential customers. Show them how the service works and how to get the most from it, using email content such as videos and testimonials.
3. Upsell/Convert: Nurture freemium customers on the benefits of upgrading. Use testimonials, case studies and ROI examples to show what they're missing or how much free usage they have left.
4. Customer Experience: The customer's experience drives the decision to keep or drop a subscription service. Trigger a nurture email series reminding customers who don't log in or use key features within a set time about the benefits they're missing.
5. Renewal: Beyond a typical renewal series, leverage behavior to identify both active and inactive users. Nurture them early with upsell and special retention offers, content and tips to turn them into engaged users.
6. Transactional: Don't overlook transactional emails, which can give customers valuable details and usage information.
7. Feedback: Although customer behavior usually trumps comments, use email to capture responses to surveys that can trigger follow-up email series with content and tips.
Until next time, take it up a notch.