Typically, people explain new subscription models as a way of stabilizing monthly revenue, but subscriptions also point to a massive failure in advertising.
Subscriptions are the current shiny object that brands ( sans Apple) who want to resonate with the capital markets dangle like a lure to get Mo Money. Either because they have insights and a subclass of customers that they can use to talk to wall street during their quarterly earnings ( or lack thereof ) reports. rf because they are going to present to some VC firm filled with MBAs who are looking for the latest buzz word ( Subscriptions).
Years ago Airlines, Hotels, Car Rental Companies used loyalty program to create some switching cost in the minds of their customers. The Reality is that all three categories have proven over time that they will "re-engineer" their loyalty programs to reduce the liability that is created and trash a substantial portion of the loyalty they have created in the process.
Don't get me wrong the insights and information that come out of the loyalty program are very valuable. Some brands keep it simple and straightforward and recognize that these customers are an annuity that will create a cushion during a recession (or other down turn).
They use the information shared both through NPS ( guest feedback) and demonstrated behavior to improve their operations and execution. Subscriptions work on a tighter shorter timeframe, they are the Meth of Loyalty programs. A quick buzz, and then a giant letdown for the consumer when they realize that they don't want to eat at brand x 6 times a month, and then resentment because every time they think of the brand after they have canceled the subscription with resentment. Come on look in your own history have you ever had trouble canceling a subscription and carried that resentment with you for long periods of time afterwards? Or perhaps your points were "disappeared" in the great Marriott reinterring of Bonvoy and now you won't stay there?
Why would a brand want to lock in a customer? Just earn their business every single time you have an interaction and ask for the profit that comes with providing an excellent experience. Don't discount your best customers, recognize them and provide them some surprise and delights but sure as hell don't discount them?
Oh but I rant. Look Subscriptions are the shiny object this year and when all is said and done they will likely go away because wall street will not react to them. Businesses will look at the cost and complexity that subscriptions bring to their operations and customers won't flock to them in a manner that creates linear growth.
The reality is that the cost and complexity of executing a loyalty platform in a fast turn commodity market is likely not offset by the trade down that you will achieve from the most loyal customer (Who are
Hi David, THANK YOU for reading and for commenting! Your comment got cut off, so please go ahead and add more if the spirit moves you. When you say "sans Apple," what exactly do you mean?
Subscriptions are the current shiny object that brands ( sans Apple) who want to resonate with the capital markets dangle like a lure to get Mo Money. Either because they have insights and a subclass of customers that they can use to talk to wall street during their quarterly earnings ( or lack thereof ) reports. rf because they are going to present to some VC firm filled with MBAs who are looking for the latest buzz word ( Subscriptions).
Years ago Airlines, Hotels, Car Rental Companies used loyalty program to create some switching cost in the minds of their customers. The Reality is that all three categories have proven over time that they will "re-engineer" their loyalty programs to reduce the liability that is created and trash a substantial portion of the loyalty they have created in the process.
Don't get me wrong the insights and information that come out of the loyalty program are very valuable. Some brands keep it simple and straightforward and recognize that these customers are an annuity that will create a cushion during a recession (or other down turn).
They use the information shared both through NPS ( guest feedback) and demonstrated behavior to improve their operations and execution. Subscriptions work on a tighter shorter timeframe, they are the Meth of Loyalty programs. A quick buzz, and then a giant letdown for the consumer when they realize that they don't want to eat at brand x 6 times a month, and then resentment because every time they think of the brand after they have canceled the subscription with resentment. Come on look in your own history have you ever had trouble canceling a subscription and carried that resentment with you for long periods of time afterwards? Or perhaps your points were "disappeared" in the great Marriott reinterring of Bonvoy and now you won't stay there?
Why would a brand want to lock in a customer? Just earn their business every single time you have an interaction and ask for the profit that comes with providing an excellent experience. Don't discount your best customers, recognize them and provide them some surprise and delights but sure as hell don't discount them?
Oh but I rant. Look Subscriptions are the shiny object this year and when all is said and done they will likely go away because wall street will not react to them. Businesses will look at the cost and complexity that subscriptions bring to their operations and customers won't flock to them in a manner that creates linear growth.
The reality is that the cost and complexity of executing a loyalty platform in a fast turn commodity market is likely not offset by the trade down that you will achieve from the most loyal customer (Who are
Hi David, THANK YOU for reading and for commenting! Your comment got cut off, so please go ahead and add more if the spirit moves you. When you say "sans Apple," what exactly do you mean?
Good stuff, buddy!
THANKS!