The Subscription Economy

Publishers have been in the subscription business for years.  But as many publishers grapple with how to maintain their subscriber files and rate base, non-publishing newcomers are horning in and doing a great job of getting folks to subscribe to their services.

Walmart recently announced a new ecommerce subscription service. For $7 a month, a subscriber will get a box of sample foods.The new subscription service called Goodies.co. It is by invitation only right now and is just moving out of its test phase.

Amazon has a slightly different wrinkle with its “subscribe and save” offer. For products people buy on a regular basis—coffee, tea, toilet paper—Amazon offers you the chance to “subscribe”, i.e. place a standing order to have the item delivered periodically (every month, two months, etc.).

While these two mega companies have taken different approaches, the basic concept is the same.  Get a someone to become a repeat customer by delivering some service on a regular basis. And a repeat customer equals a loyal customer and is good for the bottom line.

Publishers have know this for years. But unfortunately many devalued their content by giving it away online. The upshot: former subscribers have flocked to the web.  Why pay if you can get it for free?

Reward Loyalty

Walmart takes the Goodies.co concept a step further. Goodies.co has a social community online where subscribers can post reviews to earn loyalty points.These points can be redeemed in the future for boxes or items in the store. Another benefit: Walmart can do product testing through the reviews.

Amazon ensures loyalty in a different way through its Amazon prime program. A customer pays $79 a year to join Amazon prime but then they are entitled to free two-day shipping, a free Kindle book a month and free TV and movies through the Amazon prime channel.They hooked me. When I want to buy something online I usually go to Amazon where I find competitive prices, free shipping and great service.

How do many publishers reward loyalty?  They jack up the price and usally the most loyal customers pay the most.  Hmmm.  I guess it works because publishers have been using this formula for years but couldn’t we at least find ways to reward our most loyal customers with additional, no-charge features?

Here’s a another variation from children’s clothing seller Wittlebee.  At Wittlebee’s, you subscribe to get a box of specially selected clothing for your child based on preferences you give them. Their motto is: “Put your kid’s clothing on auto pilot.” The benefit? No more malls, no kid meltdowns while shopping and lower price than you pay for an equivalent articles of clothing at a store, the retailer says on its website. The subscription price is steep–$39.99 a month, but for busy moms it could be worth it.

All of these subscription programs depend on the retailer giving value and great service for the subscription. Without superior value and customer service it’s too easy to click and unsubscribe.

With these three examples in mind what steps can publishers and online content providers to improve their subscriptions models?

 

 

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