Tag Archives: subscription

The Thin Line Between Serving or Screwing You Up

“The easier you make the refund process, the more refunds happen”
Morgan Hermand-Waiche (CEO, Adore Me)

You could sell almost anything with subscription model. The dilemma for the company is how difficult or easy you make it to opt-out. On the one hand you don´t want be regarded as a fraud by having too difficult billing scheme. On the other hand, you don´t want to make it too easy to get away from the program either.

“Any recurring billing scheme is problematic from a customer service standpoint unless you err on the side of the customer even when you may not be legally obligated to.”
-Sucharity Mulpuru (Forrester research)

The ugly truth of business is that majority of our loyalty is actually laziness. The best situation is that you truly love your subscription service and it gives a great diversity and value (e.g. Spotify, NetFlix, your gym and other entertainment services). Quite often your subscription is quite boring and if you could end your subscription right now with one-touch of button you would do it. But because there is no that button, you keep on going on because it is ok.

The perception of difficulty is sometimes more valuable than being truly difficult.

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Could You Sell Everything with Subscription Business Model?

There has been a surge of subscription-based businesses lately. I am not only talking about subscription entertainment services like Netflix, Hulu or Spotify. There has been also surge in subscription models both in mundane physical (Dollar Shave Club) and in high-interest software (Adobe Creative Cloud).

Naturally the model is not new, newspaper subscriptions have been around for almost 300 years. You could also view library institution as some kind of a precursor to Spotify and other entertainment subscription services. You “subscribe” by paying taxes (in Finland), or by paying nominal fee (in Singapore).  Digital has enabled more smoother service and also more innovative business models (Birchbox). In catalog-era Birchbox model would not have been feasible, but thanks to Internet you can convert people more easily from receiving the samples to buying the actual products online.

The upside for the companies with subscription model is two-folded, firstly lifetime-customer-value will likely be higher and the business becomes more predictable. For consumer the main benefit is of course the convenience. You are getting new socks every month, they are invoiced automatically and you do not run out of socks.

“All the evidence suggests that consumers love subscription content models — it’s the original model of magazines and newspapers and cable, and now it’s the power behind Netflix.”
James McQuavey (Forrester)

Subscription model is not right approach for every company, but might be something to consider. Whether you are working in product or service, it might be interesting addition to your portfolio or differentiator against competitors. Some considerations I have noticed based on subscription based models:

1. It has to be habitual usage for products
Tie-a-month works for snappy-dressed businessman but is not necessarily appealing to a person, who puts on the tie only to weddings and funerals. Usually the cycle is monthly, but could subscription model work with longer breaks? Your computer would be updated yearly? Your car would be updated every second year? Maybe not.
Interesting examples:
Miru (Monthly subscription to contact lenses)
French Cellar (Monthly subscription to French wines in Singapore)
The main challenge with product subscriptions is that you end up with lots of stuff. For many people that is not necessarily a problem, but as people. That is why I think there is definitely some kind of opportunity with combined subscription & swapping/recycling service (Such as Swapstyle or Boxcycle). It is definitely route to explore.

2. Subscribed Service is about access you value
Actually with Spotify you are not really paying for ability to listen to the music you are paying for the access to the music. You might not listen to music that much, but you want to pay for the access to that Barry White song on just the right moment. This is especially easy to see with Priority Pass. The knowledge that you could go to lounge in Airport makes already your travelling more enjoyable, whether you entertain that access or not.
Interesting examples (besides the abovementioned):
Ordergroove: They actually create subscription model platforms for their clients. I am not sure if they have some kind of subscription based compensation system build in their billings, but it would make sense.
One opportunity comes to mind with services. I like to go to different culture events, but the information for those comes many times too sporadically. You might notice interesting exhibition when it is already over. You have to search for the info from different sources, which takes time. What if you could have subscription-based culture package? You would select your level of commitment: from light once-a-month to heavy-user once-a-week. Then you would get access to an event on a fixed date. The model could also have range from just recommendation to total turnkey solution with tickets and transportation. That would be also at least worth an exploration.

Could you change your business to subscription model?

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Google Reader and the Missed Opportunity of RSS Feeds

Google Reader is now officially announced dead. Slowly it has been dying for quite a while.

I am one of the apparently very few relics, who have been using Google Reader actively for years and years. Personally it has been the most useful Google tool for me right after search and Gmail. Without using Google Reader (and other digital fossil Del.icio.us, which is still alive but struggling), writing of my first book would have been much more tedious process.

Looking from the business perspective and reflecting the overall downward trend of success of RSS feeds, the decision to kill Google Reader is a no-brainer. Everyone gets their news and blog posts either from search or from social networks, who needs separate place to go for their internet content?

Well us professionals and hobbyist, for instance.

I am passionate about few things. Other half is a work related and others are hobbies (basketball, hip-hop music, literature and movies). Google reader was my starting point for getting my daily fix on those high-interest subjects. Additionally I also use social networks and Google search to find stuff, but for me those are not the primary sources of information. When sharing is the only currency, it will be eventually lead to dumbed down content. Just watch any of the titles of your average web publication.

So farewell RSS feeds, the social media sharing is the way to drive traffic these days.

The demise of RSS Feeds, can be summarized to one word: complicated.
Starting with the name: RSS sounds like some kind of disease. Then there was the ease of use, or lack thereof. Although you did not have to be rocket scientist to get yourself RSS feed reader, it required still more commitment than the normal internet user wants to have with their platforms. The adding of the RSS feeds was not intuitive enough and the logo did not really reach adequate awareness. If following and subscribing would have had button something akin to Facebook like, the situation might be totally different.

Personal blogs have been largely replaced by tweets and Facebook status updates. The promise of RSS Feed Reader is still valid. You get the news you are actively interested to one place. People have not stopped consuming content in the Internet, more the other way around. The way to consume it has shifted more towards social, but there are some users who want to have also more curated experience for their content. Those users are not necessarily lucrative target audience.

Like Rob Fishman points out in his excellent article in Buzzfeed, Google Reader was the closest to functioning social network Google has ever been (excluding maybe for YouTube). I am deliberately excluding Gmail, as the nature of it is more 1-to-1 connections. As the “success” of Google+has shown, building it over Gmail was not necessarily the wisest decision. The mass using Gmail does not necessarily convert to more public sharing of social network, although it might make business sense on the paper. If Google would have invested to Google Reader and pushed it organically towards more social experience, they might have really successful social platform in their hands.

I was actually really active in Google Reader back in the day and sharing content like there was no tomorrow. That lasted until it was connected to Google+, which made it too overbearing. I was not the only one. Google Reader really never got a chance to truly try to strive in the marketplace on its own. Like former Google product manager explains in Quora, the Reader developer team was stretched thin and utilized mostly in other failed projects. Google Reader –based social network would have been the social platform, which is still truly lacking in the marketplace. The social network that is built around your user interests and passions. Maybe the new MySpace is trying to fill that gap, at least with music.

I will not shed tears for Google Reader. The decision makes definite short-term business sense. On the long run however, we will never know. Disappearance of Google Reader might have surprising effects on the digital content ecosystem. Although it has not been major traffic driver for the sites, it might alter and shift the readership radically of certain content providers.

Killing Google Reader and betting with Google+ are probably smart decisions. The real question is, are they wise decisions? Meanwhile Google Reader remains as an artifact of the potential social media success Google is still desperately trying to achieve. Until 1st of July, that is. As I am writing this, I am moving my Google Reader subscriptions to Feedly.

Old habits are hard to kill.

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