For many people, subscription models offer a convenient way of continuing services uninterrupted and needing to manually make payments. It’s a sort of “out of sight, out of mind” payment plan where the customer can just relax and enjoy the continuous service.
It’s said that the subscription model was first pioneered in the 17th century by book publishers. Whatever the history of the business model, it has become extremely popular in the modern era, with many online platforms and stores offering some type of subscription service.
In this article, we’ll examine what makes the subscription model so enticing and how it affects consumer psychology.
Why do customers enjoy subscription services?
While traditionally subscription services were offered for a single type of service, many businesses are offering very customizable subscription plans. We saw this with cable television for many years, and optional channel subscriptions. In a way many online subscription models sort of mirror this, with optional add-ons to the customer’s subscription service.
However we also see plenty of variety in other subscription services as well. For example, flower delivery company Bouqs.com allows customers to choose different types of bouquets and flower varieties that can be delivered monthly or even weekly. Customers can choose from traditional flowers like roses, or seasonal blooms and flowers you’d see at the farmer’s market.
So from those examples, we can see that modern subscription services can offer a convenience factor aside from just automatic payments. Customers are able to put together exact package plans they want in their subscription service, bundling multiple services or products together under one subscription.
Customers may enjoy sampling products
Some businesses may offer samples of their products in subscriptions, such as variety packages. For example, a subscription to a candy and treats box will give you a variety of candies to sample with each delivery, so the customer can figure out which ones they really enjoy and may possibly focus their purchases on in the future.
Furthermore, some businesses will include “free” products in their subscription services, or trials of other services they offer. For example, you can try Amazon Video for a 30-day free trial, but you can also get Amazon Video included with a Prime membership. This sort of service bundling adds value to a subscription model, as customers feel like they’re getting several services under one umbrella.
Spotify’s subscription service not only allows you to listen to music ad-free and download playlists for offline listening, but will also curate daily and weekly playlists for you based on similar music artists for genres and artists you frequently listen to.
So a Spotify subscription not only offers customers the ability to listen to the music they want, but also helps customers discover new music, which keeps them subscribed.
The psychology of discounts
All shoppers love a good discount, any many subscription services seem to offer discounted services as part of the subscription deal. If the customer feels like they’re getting a good deal and then a little extra for their subscription, they’re more likely to keep the subscription and be loyal customers.
Businesses can also leverage this, as consumers are shown to spend more money when they believe they’re getting discounts. To use Amazon as an example again, an Amazon Prime subscription offers free shipping on many purchases, which will save the customer money.
On the other hand, the customer may end up purchasing many additional products because of the free shipping. In fact, Amazon Prime members end up shopping twice as much and spending around $1,300 more annually on purchases than non-Prime members.
Subscriptions can make customers feel more valued
Businesses put a lot of money into convincing customers to opt-in to subscription services, and so retaining customer loyalty often means frequently asking customers for their opinions, or keeping customers aware of the latest deals being offered.
This relationship benefits both parties, as the business can depend on the financial stream from subscribed customers, and the customer feels like they’re appreciated and have more of an input on how the company services the customer.