What booming subscription model means for marketers
Subscription models continue to be a hot ticket for American consumers as their thirst for the ‘latest and greatest’ makes a change from owning that new thing and simply using it for a while. That change, according to Zuora’s founder, is one reason that more merchants and brands should consider joining in to the boom.
“The time is now for companies to embrace the subscription business model,” said Amy Konary, Founder and Chair of the Subscribed Institute at Zuora. “Our bi-annual Subscription Economy Index suggests that brands can increase value to their customers through the ongoing delivery of services when and where they’re needed.”
According to the report more than half of consumers (64%) say they feel ‘more connected’ to companies they use for subscriptions, and more than one-third (42%) say convenience is their biggest reason for subscription. Cost savings and the variety of products also top the list.
But, what’s in a subscription for a brand? Consider this: Zuora’s data finds that subscription business during the pandemic out-performed product-based peer revenue (21% increase). The revenue per subscriber increased by about 18% (2020 vs. 2019). Some of that growth could be because of the pandemic and the amount of time people spent at home amid store limitations and work-from-home opportunities. However, its interesting to note that the stock market is apparently backing subscription companies.
“Global organizations are propelling their businesses forward by embracing technology, broadening access to services, and placing the power in the hands of their subscribers,” said Konary. “We recommend that businesses design their offerings for ultimate consumer flexibility and freedom, so that customers can tap into them anytime, anywhere, to whatever extent that they choose.”
Subscription services in the SEI performed higher than in regional stock markets.