More consumer brands are
following the lead of Netflix, Spotify, Harry’s and others in trying to
encourage customers to see them as ‘a service to subscribe to’ as well as a
product to buy. There is a distinction between the purely digital services and
the physical brands creating a virtual service but both types are trying to
introduce more touchpoints and create a stronger relationship with the buyer.
Over the past six months we have seen this
model extend into previously unexpected categories. Xbox has introduced an ‘All
Access’ subscription programme. A single monthly payment gives users an Xbox
console, Xbox Live, and access to streaming games. Nespresso has introduced a
similar model for its coffee machines and pods — by paying a minimal amount for
the machine and commiting to membership and a subscription for coffee pods,
customers are moving from buying a machine to buying a lifestyle.
Uber and Lyft are both
testing or introducing subscription models in the US, encouraging people to pay
a monthly amount for a number of short rides, or even to protect them from paying
surge pricing. LaaS should be deployed carefully, depending on factors like the
value proposition and frequency of purchase, to build service into the
offering. Brands selling physical products should try to keep the experience
special — use one-offs, birthday deliveries, and layers of membership to
personalise the offering. It may be better to partner with an existing service,
or find a complimentary service than establish your own programme, depending on
the role the brand is trying to play in its customers’ lives.
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