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Let's
start with a little drill ...
To get an insight
into your situation regarding subscription, why don't you take
the following test? Add one point for each element in
the list to which you have subscribed. If you have subscribed
more than once for one given element, add as many points as
necessary:
-
Phone company for home,
-
Cell phone company,
-
Magazines and newspapers,
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Pay-TV channels,
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Cable provider,Internet provider.
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You have between 3 and 5 points: you belong
to the tribe of minimalists or mavericks.
-
You have between 5 and 10 points: OK, you
are the average subscriber.
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You have more than 10 points: congratulations!
You have outstanding organization skills to manage so many
subscriptions!
I.
The demand for subscription
I.1.
Society gets more and more into Service
The fact subscription
tends to become a prevalent means of consuming is a sign of
a highly Service-oriented society. Indeed, the subscriber is
rather a consumer of a service than of a good:
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He can get regular information from the magazines he receives;
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He can access a world of communication through various
channels: internet providers, Telco companies…
-
He can entertain himself and enhance his cultural life
with cable TV and video rentals.
I.2.
The subscriber wants to assert his belonging to a community
Subscribers are
also members of a community. Internet is a good example, since
major ISPs are also very often portals that grant a series of
services, ranging from newsgroups to chat rooms.
On top of that,
there is an emotional rationale behind subscription. Subscribing
to a magazine is a means of telling one’s identity and
values.
I.3.
The subscriber is a consumer with little time in search
for simplicity
World is getting
more complex by the day, so consumers want to satisfy their
needs as easily and quickly as possible. Subscription is a good
solution because it makes it possible to replace a series of
repeated buying acts by one single subscription, made once and
for all. To top it all and make it even simpler, subscriptions
are often tacitly renewed.
I.4.
The subscriber looks for permanence and continuity
World is changing
at an increasing pace and even though this is very exciting,
it can also be frustrating. Things we knew turn false overnight,
behaviors we’ve always had become obsolete. In this turmoil,
many people want to take a break, to be able to rely on stable
certainties, to structure their environment, including their
consumer environment. Subscription is part of this logic.
II.
The supply of subscription
Thinking twice,
it is obvious that the consumer is not the only one interested
in subscribing. It is also the companies’ well-understood
interest to turn their customers into subscribers. This move
has three advantages for companies.
II.1.
Hook the consumer
The subscriber is
a captive consumer, which makes it possible for the firm to
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Decrease acquisition costs: a subscriber
is a consumer for the duration of the subscription; when it
is over, the subscriber becomes a hyper qualified prospect.
It is far easier and cheaper to extend the commercial relation
with him than recruiting a brand new customer,
- Develop relational marketing: the subscriber is a well-known
customer, especially if he has been a subscriber for many years.
He might have provided individual data at the time of subscription,
replied mailings, or bought additional products, all of which
can be the basis of a one-to-one commercial relation. This data
can also generate extra revenues for the company, which can
re-sell it or rent it,
- Sell more: it is very easy to induce a subscriber to sign
up for additional services: in the field of press, subscription
to other magazines; in the field of mobile communication, high
value-added services, such as caller ID, detailed billing, virtual
secretary
II.2
Make cash flows more regular
It is better for a company to have faithful subscribers than customers
who buy once in a while. Indeed, subscriptions make for regular
money coming in, which helps managing turnover.
II.3.
Change the buying experience
Last but not least, subscription changes the way the act of
consuming is perceived by the customer:
A subscriber who pays a monthly fee will try
to make the most of it. For instance, it makes sense to say
mobile phone all-in-price formulas entice subscribers to phone
longer than they would do otherwise.
III.
Use and abuse of subscription
On the one hand, subscription is very comfortable for consumers;
on the other hand, companies have a huge interest in registering
subscribers. Everything could be perfect if the subscription market
was efficient. Yet, consumers are clearly in a good shape to make
the most of the subscription trend, mostly at the expense of companies.
III.1
Get high value added products at a fraction of the price
The consumer learned how to take advantage of subscription offers
to acquire costly materials at a low price. For instance, many
customers subscribe a mobile phone contract just to get for one
dollar a phone that would cost them $300 if they were to buy it
at the normal price. Then, they cancel their subscription as soon
as the contract allows it. Even worse, on a company’s perspective:
some people can simply decide not to pay.
III.2
Under-estimate the value of the good or service
Subscription also jeopardizes the perceived value of the good
in the eyes of the consumer. Here is an example of this threat.
A few months ago, French movie theaters launched subscription
cards. The owner of such a card can go and see as many movies
as he likes for a monthly fee. But then, if I own such a card,
why should I wait and get silently bored on my seat if I don't
like the movie? I can afford the luxury of leaving after 15 minutes
if I want; I paid my monthly subscription anyway. And incidentally,
I can noisily let other, peaceful viewers know of my discontent.
Unfortunately, this kind of behavior is increasingly frequent
in French theaters. But then, what remains of the artistic value
supposedly granted to the movie? It's not about watching a movie
any more, but just "consuming" cinema. The theater companies are
perfectly aware of this, and even use it as a commercial argument.
Indeed, an add for one of these cards states: "you have to leave?
Don't worry, you'll always be able to come back later." In the
long run, such a strategy might drastically reduce the value perceived
by the customer in the movie, which is obviously detrimental to
the product variable of the marketing mix.
III.3
Capitalize on competition
Last but not least, the consumer has perfectly understood that
his best interest was to continuously shift from one free subscription
trial offer to the other.
Indeed, it is perfectly feasible to surf the Net for free (I
mean REALLY FREE, including phone connection): you just have to
be subscribed to several free ISP and shift from one to the other.
Similarly, if you subscribe to one offer from a good or service
provider, resign, subscribe to the competitor and then come back
to the first one, you can indefinitely benefit from particularly
alluring welcoming packs.
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Conclusion:
Subscription and involvement
Even though this may sound as a paradox, the appetite for subscription
maybe a sign that many people are afraid of any kind of involvement
these days. True, when a consumer subscribes to something, he
makes the decision to do so. But is he always aware of what he
subscribes to? For instance, many consumers complain when they
are prevented from resigning their mobile phone subscription.
But have they ever read their contract carefully?
In fact, subscription is not a denial of involvement per se.
To a certain extent though, accepting automatic subscription renewal
with no question can be regarded as consumer comatose. Indeed,
subscribing to a service or to a source of information is granting
one's trust to it once and for all. That is also subscribing to
an idea and not putting it to the question for the duration of
the subscription. True, a subscription can be canceled. But take
France's example. Many consumers declare they are dissatisfied
with the high subscription fee they are charged by French historic
telco company France Telecom. There used to be a monopoly in France
and people had to have a subscription to France Telecom. But today,
there are alternate solutions, and it is perfectly conceivable
to cancel one's subscription while still being reachable by friends
and family. Yet, very few of these dissatisfied consumers have
canceled their subscription. Or how many people can you hear criticize
their doctor while still calling him each time they're sick?
Citizenship is a fashionable concept these days. People talk
about people-empowered companies, worry about turn-out rates when
elections take place, and emphasize the necessity of being part
of a non-profit organization. People, let's do it! But as a consumer,
please, give me a break !
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