How Subscription Brands Can Survive the Financial Crisis

Today, ACNE London held its virtual session looking at what steps subscription brands can take in order to survive the subscription downturns. Joining the panel from FT was MD consumer revenue Fiona Spooner, VP growth and performance marketing at WW, Tony Miller, as well as Sophie Pullum, senior digital transformation strategist at Deloitte Digital.

The webinar started with a comment from the former head of brand at Mindful Chef: “Subscription brands exist to create convenience - that’s why people buy into them. Through covid-19, people had a genuine need to get as much as possible delivered to their house, they needed more convenience. The challenge now is that consumer sentiment is changing. Covid-19 was routine-based, whereas now there are many variables, it’s not always convenient to get a recipe box delivered to the house.”

Speaking on the topic from the perspective of a true legacy subscription brand, bearing in mind WW started its journey in the 1960s, WW’s Tony Miller said that WW’s success is rooted in listening to consumers, getting the correct feedback, and surveying. The brand has indeed undergone almost 60 years of drastic societal attitude changes towards weight loss and health, which puts WW in a unique position as the one brand that has been through them all. “A big part of our USP is about the strength of our community,” said Tony. He explains that through the 60 strong years, what hasn’t changed is the strong community behind WW, whether that community is together to gain confidence, lose weight or change its energy. “Standing the test of time has to do with listening to our members, evolving with them and ensuring we’re meeting them where they are to provide them with the community that is at the heart of everything.”

He said that one of the most important changes to WW’s brand strategy happened over the pandemic, when people’s attitude toward exercise changed massively - and WW’s subscription rates skyrocketed. On the flip side, the pandemic also inversely affected another group of consumers that were reluctant to exercise due to the lack of socialising. “We had to constantly pivot as a brand - and still have to now - as physical mediums are more available when people crave back the connection and meeting face to face,” he said.

Fiona Spooner, has also seen quite a bit of change in FT’s subscription model since joining in 2003, and has witnessed the highs and lows that led to its evolution. “The change is exactly what kept me at the FT for so long,” shared Fiona. “When we first implemented a paywall, nobody paid for anything online, let alone news. That’s changed dramatically now, as people understand the importance of valuable news content and the implications of reading bad journalism. The consumer's perception of that has changed and people know that if they want to read the truth, especially in today’s climate, then that is something they need to support.” Fiona said that content also evolved - although once readers were reluctant to pay, today they see the increased value in the content that they do pay for, reflected by the evolution of video, audio, and long form journalism.

However, consumers also have higher expectations with regard to subscription publications. “They are very rightly vocal about expecting a better standard of behaviour in business. There is more pressure on companies to provide clarity on not just the pricing proposition, but also on their business through the lens of ethics, principles, environment and society,” explained Fiona. “The expectations are not changing only in regards to the content and the product at hand, but also about the ethics of the business and marketing.”

Sophie Pullum, as somebody who works across multiple sectors and brands with subscription models, added that brands might need to relook at their value propositions, in light of the looming financial crisis. According to her, we’re increasingly seeing brands that don’t normally use subscription models, evolve into them, such as luxury car brands, high street brands and others. “Platforms like TikTok and Instagram are changing the way we buy things, there is a lot more direct to consumer environment than ever, and that is changing how we view subscriptions.” Due to this, the experts on the panel agreed that the market is experiencing something of an overwhelm in terms of how many brands are taking up the subscription model. When Fiona started at the FT, a paywall was unheard of, but today she revealed that on average about 15% of everyone in the UK’s monthly payments are spent on recreational subscriptions. “There is literally nothing you can’t subscribe to today and anyone you speak to has had a nightmare cancellation story,” she said..

So how can a brand stepping into the model stand out? Fiona continued, “I think that transparency and cancellation ease, as well as good content is what retains people. Being able to build easy journeys that don’t try and catch people out, don’t try to trick them into staying, but building a product that is appropriate for them is the right way to go.” She also explained that when people do unsubscribe it’s handy for brands to keep the relationship between them and the consumer going by providing them with a free newsletter or podcast that can keep them loyal to the brand. Tony added that brands should also be “really clear on their USP and what they’re providing beyond the price point.”

However, as the purse strings tighten and prices become unbearable for many, subscription brands that are easy to opt in and out of might be the first thing to go when consumers are making their monthly budget cuts. Sophie said that there should be an assessment of what value the subscription brings to the individual and what the brand is giving to them beyond a basic subscription. “Look at a subscription model for example, where the coffee is not the best quality coffee, but that particular subscription is actually cheaper or competitive with what’s happening in the shops. Consumers can actually see that and understand that the model doesn’t mean more expensive, but it still gives amazing value at this particular time. It is really key for customers to see that it’s not the most expensive option, it’s the best value option.” 

Agreeing with the Deloitte Digital strategist, Tony believes the responsibility lies on brands to show the added value and communicate why that particular subscription should stay for another month, as it fights for a share of the customer’s finite attention.“It’s the simplicity of those messages that is most important and it’s that constant drumbeat of value, but breaking it down to be simple and repetitive. The more repetitive you are, the more simple your message is, your consumers will take it in. Simple and consistent messaging is the way to go in the fight for attention.”