Consumers Unmasked: EPAM Continuum Says…
In the age of fickle brand loyalties and disrupted supply chains, one thing that many consumer-facing businesses are realizing is the value of subscriptions. In addition to ensuring the predictability of demand, this booming business model offers a way for companies to gather more data on customers, encourage loyalty and drive recurring revenues.
But, while businesses may understand the value of subscriptions to them, consumers aren’t as convinced. In our first Consumers Unmasked report, our EPAM Continuum Consumer Council shared that they had a general wariness of subscription services, feeling that they:
- can be too expensive
- are used too infrequently to be valuable
- offer additional services, which are seen as justifying the subscription price rather than being genuinely useful
At the same time, the report also revealed that customers are motivated by new and exciting experiences. As the pandemic has lingered on over the past 18 months, consumers have been starved for real experiences with brands across all industries. Our council repeatedly shared that what has driven them to businesses was providing innovative ways to experience their brand—without requiring them to do so in person.
“Something I really liked was the offer of a local shop to make an appointment for a video call to shop. The assistant showed me everything in the shop via a WhatsApp video call. That was great!”
These insights reinforce a concept that has been popularized by a Harvard Business Review article at the turn of the century. In the article, the authors talk about how the mankind has, over the last century, progressed to an experience-based economy. They use the example of a birthday cake to illustrate the transition:
“As a vestige of the agrarian economy, mothers made birthday cakes from scratch, mixing farm commodities (flour, sugar, butter, and eggs) that together cost mere dimes. As the goods-based industrial economy advanced, moms paid a dollar or two to Betty Crocker for premixed ingredients. Later, when the service economy took hold, busy parents ordered cakes from the bakery or grocery store, which, at $10 or $15, cost ten times as much as the packaged ingredients. Now, in the time-starved 1990s, parents neither make the birthday cake nor even throw the party. Instead, they spend $100 or more to “outsource” the entire event to Chuck E. Cheese’s, the Discovery Zone, the Mining Company, or some other business that stages a memorable event for the kids—and often throws in the cake for free.”
Additionally, customers are still on the hunt for more value for their money. As one of our council members noted, this isn’t just about who’s providing the cheapest product, but who’s providing the best product at the right price.
“Value for money doesn't have to mean cheap. It just has to mean that I get the quality and durability I expect for the money that I pay.”
So, how can businesses address customer’s suspicious attitude towards subscription services and provide them perceived value at every stage of the sales journey? Well, the answer may just lie in a experience-driven subscription business model. By offering a fun experience at every stage of the sales journey, brands can share unique, innovative offerings to help customers learn about their brand, try it, interact with it and ultimately become loyal to it. Below, learn how brands are making each part of the sales funnel valuable to—and fun for—all its consumers.
Creating Brand Awareness and Trial Opportunities
As any good marketer knows, it’s imperative to surprise and delight your customers at any step of the sales process—but even more so at the beginning.
An example of a company doing this well is Brandshare. Through subscription-based boxes, the company makes discoverability fun by offering samples across a variety of industries, introducing customers to new brands in a favorable light.
Another business making strides in this area is StitchFix. After answering several survey questions on style preference and fit, customers get a curated box of five fashion products at their desired frequency.
The “surprise and delight” aspect of both of these offerings is what makes customer come back for more on each and every sales cycle.
The fun of subscriptions isn’t only relevant to discoverability, however. Many well-known brands are capitalizing on the value of subscriptions by ensuring their customers get the best experience possible at the lowest price. Two well-known examples of that remain in the food industry: Taco Bell and Panera Bread.
Earlier this year, Panera began offering a monthly coffee subscription called MyPanera+, which gave customers unlimited hot or iced coffee for $8.99 a month. In September, Taco Bell rolled out its 30-day Taco Lovers Pass which offers subscribers unlimited tacos for $5-$10 per month depending on their plan, even unlocking new flavors to consumers once a subscription is purchased.
Both of these options are cheaper to customers if they buy products at one of these stores more than three times per month, enticing them to go there more frequently. Not only that but the variety in options available to them—particularly in the case of Taco Bell—makes the experience more exciting and fun, encouraging consumers to use their subscription repeatedly.
Perhaps the strongest subscription-based loyalty program in the world is Amazon Prime. By signing up for the program, customers not only get free and faster shipping on goods that they order, but they also get access—either unlimited or at a lower price point—to Amazon’s streaming services across audiobooks, music, movies and TV. In doing so, Amazon has made subscription-based loyalty both fun and valuable to customers, quelling their fears of cost inefficiency and giving them new services to take advantage of. These options reduce the likelihood of subscribers feeling like they’re not getting their money’s worth and taking their business elsewhere.
When it comes to providing customers with the experiences they are desperately seeking during times of uncertainty, subscription services just may be the answer to fulfilling their needs. By creating and integrating a subscription model, consumer-facing businesses can provide customers with innovative and creative offerings, delivering the experience economy to their doorsteps.
To ensure you’re creating the right subscription services, you need a business partner who can help you frame the right problems to solve, find creative solutions and implement the solution with the experience and skill your business needs.
Read our latest consumer behavior research and register to follow the 12-month Consumers Unmasked study here.
*Names have been changed.