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The Influencers

I Subscribe, You Subscribe, We All Subscribe

INFLUENCER: Havas Formula's Emily Porter discusses the most effective way to communicate and promote the subscription model as more traditional brands shift to it

I Subscribe, You Subscribe, We All Subscribe

There’s no argument that the subscription economy is here; in full swing and unlikely to stop. Fuelled by technology, today’s consumers and business professionals can subscribe to countless products and services - from the most common (streaming entertainment content) to the more obscure (building energy management services).

The traditional model of ownership has been largely replaced with a pass to access what we need, when we need it, thanks in part to myriad devices and the Internet. In fact, it’s been estimated that nearly 35 percent of Fortune 2000 companies generate revenue via subscriptions. Taking cues from the big dogs - Amazon, Spotify, Netflix - other corporate players are now looking to capitalise on the recurring revenue bandwagon by making the transition to subscription models. From a business perspective, however, the transition isn’t without its challenges - including the risk of customer churn, maintaining customer satisfaction, and operational concerns such as security and subscription management, to name a few.

As more traditional brands shift to a subscription model, how to communicate about and promote this new offering is paramount to ensuring a smooth transition. Before you give flight to a PR strategy supporting your recently adopted subscription model, consider the following:

1. Take off on a long runway

Change is not always easy, especially for customers who already may be set in their ways and accustomed to how they currently receive their products or services. What’s more is they may not understand or appreciate the long-term vision for where your business is headed. Case in point: even the now successful Adobe suffered significant customer rebellion (even including a petition!) when it transitioned from its product-sales model to a cloud-based model nearly five years ago. As you plan to transition your business model and introduce subscription, be careful that your PR strategy isn’t abrupt, but that it’s built on a long runway, with adequate time to condition the marketplace and educate customers on why it makes sense.

 

2. Let the pilots do the talking

The biggest PR win you have in your back pocket is the customer experience. Without it, your transition will bomb. So, before you migrate customers into a new model, ensure your subscription experience will be everything to write home about and more. Consider building in a pilot phase to your subscription model by hand-selecting customers to trial your new offering and provide candid feedback so you can re-tool as necessary. Once the pilot customers are happy with the new model, you’ll be ready for prime-time - leveraging these customers among the media to validate that this new model is the right move for your brand.

 

3. Show the value of first class

Central to launching a subscription model is communicating what’s in it for the customer. They need to understand what value they’ll get beyond the traditional model and, of course, in comparison to competitors. Recently, data visualisation company Tableau took some heat when it moved to a subscription model that was far more expensive than its competitors’ solutions. Tableau has communicated that their option will decrease the initial investment companies will have to make, while also allowing its customers to make it available to more of their employees. The verdict is still out as Tableau - which is late to the subscription party and trying to play catch up - communicates that their product is superior and worth the higher price point. The company missed its PR opportunity on the front end to plant the seed earlier and more clearly articulate the value proposition of its subscription model.

 

4. No hidden fees

Going hand in hand with value and the customer experience is transparency. Being transparent about what your subscription model includes and what the future may hold is the perfect way to set the stage early on and get customers behind you. For example, the ad-free publishing platform Medium announced a $5 per month subscription fee claiming, “You don’t really get anything yet.” The statement is both refreshingly honest and PR buzz-worthy (the announcement has already been covered by The Verge, TechCrunch, Engadget, and Mashable, among others), allowing Medium to offer its 'upgraded members' a chance to become a founding member. By offering an initially low price point, the platform is seeking to create a desirable premium package that consumers will want while differentiating the brand.

 

5. Be mindful of your approach

Every day companies are shifting from traditional sales models to subscription-based models. For many, they are lagging in their decision to make the transition - grappling with the infrastructure, operational demands, and customer reactions - and successfully pull it all together. Whether investors, customers or employees, all stakeholders will have their own reservations and opinions about the shift you’re making.  As you approach introducing your transition, remember you are just one of hundreds on any given day. Successfully communicating about the model is just as important, if not more, than the execution itself.

While many will attest to how subscriptions have made their lives easier, one still has to wonder: will the subscription model bubble burst? As the 'right now' economy continues at full speed and customer expectations increase daily, I think it’s safe to say that it’s here to stay - even if it’s uncertain if the model will be successful across various industries and types of businesses. If you’re looking to make the transition, just make sure you’re not too trigger happy and you think through not only the business implications but conditioning the marketplace and preparing a smart communications approach.


Emily Porter is executive vice president at Havas Formula

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