The idea of a recurring revenue business model is seductive. It has to be easier to drive value from a loyal band of happy known-and-named customers than have to slug it out for every anonymous purchase, right? Media companies of all shapes and sizes have dabbled in subscriptions for years. But now it’s not just the media brands that are looking to go full-throttle on subs-first. The journey can be long so be warned, building a business which creates value from ongoing direct to consumer relationships requires sustained commitment. We’ve done a tonne of work with companies in a range of sectors who are doing just that, so we’ve put together this handy list of top tips to help you start as you mean to go on…
Tip #1 : Know what you’re getting yourself into
Heads up, identifying what capabilities you need is the easy bit. Shifting the attitudes of the business towards customer value creation sounds easy but is a lot harder. Subscription business models work on driving lifetime value rather than short term acquisition numbers. It takes patience to get it right.
Tip #2 : Let the long term vision guide your short term tactics
Just chasing ‘quick wins’ can take you down the wrong road unless you know precisely where you’re headed. Make sure you have a “north star”. Articulate the blueprint. Be clear on what you’re aiming for, & use every step forward as a proof point to build internal support for your mission. Test and learn. Test and learn. Do what works and reject what doesn’t create value.
Tip #3 : Everything you do will impact customer experience
A successful subscription business doesn’t stop with sign up and goes way beyond the marketing discipline. All your activity, free or paid, must work together, moving from unknown user to known customer to paying subscriber. Seamless. Frictionless. Everything you do impacts the customer’s experience of your brand and the journey to value. Subscription is an enterprise sport.
Tip #4 : Be a storyteller
Make it everyone’s mission to understand what the business is trying to achieve and the value opportunity through a subscription model. Effective delivery depends on connecting every person, every meeting and every team’s performance to improving the things that matter most to your customers: content, experience and service. It’s everyone’s business to obsess about all three. Celebrate successes and share setbacks more openly and more often than you ever have before.
Tip #5 : The interconnectedness of all things
Smash the silos, break the barriers. If product, content, marketing and customer engagement work in isolation, it’s a recipe for inefficiency, waste and lots of missed opportunities. You must connect the business around common goals; with the back office aligned and focused on serving the front. Create a single army marching in step.
Tip #6 : Reframe the metrics
Many of the KPIs you’ve cherished for years will need to change. Retention is cheaper than acquisition. Net volume matters, but engagement and lifetime value matters more. The subscription model is all about length and breadth of customer relationship. Obsess about defining the value metrics for your business and track as if your life depends on it. All businesses need one version of the truth.
Tip #7 : Optimise like you mean it
Tip #7 : Optimise like you mean it
The trick is to know what to optimise… and we’re not just talking about marketing. Trust what your data is telling you about your value levers and optimise the ones that create the most value for your and for your customer. Test and learn, then test and learn some more because optimisation is a journey that never ends.
Tip #8 : Do your content economics homework
There is a new world, called Content Economics. Content is often the biggest bet your business makes. Identify which content drives acquisition and engagement, then stop wasting energy (and money) creating content that does neither. Encourage a fact based debate about the balance of power between editorial instinct and commercial interest.
Tip #9 : Customer service is a value driver
Done right, customer service can do more than just solve problems. It provides a platform to establish your brand’s reputation and drive retention. Think scientifically about how you can use it, and with which customers, to drive value from every interaction – proactively and reactively. Make sure your whole business understands what you’re trying to achieve and play a part in making it happen, rather than it being an afterthought.
Tip #10 : Don’t fall in the data excuse trap
It’s true that without good data, you’re nowhere. But good is a subjective term. Apply what you have to understand your customers, your propositions and your performance and you’ll gather more and more in the process. Saying that your data isn’t good enough to get insights is just an excuse for not using what you have. Your journey has to start somewhere.