Can Automakers Learn to Love the Subscription Model?
Automakers must steer carefully with subscription models to avoid the potholes of the past.
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Starting or scaling a subscription business requires rethinking of business strategy, organization culture, processes, product, compensation and people all driven by a strong foundation of data management and insights.
LatentView partners with leading subscription companies helping them drive tangible outcomes through data driven insights along the customer journey. As an end-to-end solution provider our Consulting Services, Data Engineering, Data Science and Analytics capabilities deliver holistic and impactful solutions to our partners.
Five Success Factors That Drive Subscriber Growth
A Clear and Unique Value Proposition
Personas & Segmentation
Personalization
Loyalty/Rewards Programs
Seamless User Experience
A Clear and Unique Value Proposition
- Brands with strong value propositions enjoyed 76% growth over the decade
- 69% of B2Bs have established value propositions. However, only 2.2% of companies have value propositions deemed “useful” by consumers
Personas & Segmentation
- Marketing personas make websites 2-5X more effective and easier to use by targeted customers
- Buyer personas in email campaigns improve open rate by 2X and clickthrough rate by 5X
Personalization
- Companies that use advanced personalization methods can realize an improvement of >20% In their NPS and Incremental revenue growth of >10%
Loyalty/Rewards Programs
- Companies with strong loyalty marketing programs grow revenues 2.5 times faster than their competitors and generate 100-400% higher returns to shareholders
Seamless User Experience
- Companies with a customer experience mindset drive revenue 4-8% higher than the rest of their industries
Why LatentView Analytics for Subscription?
Our Thinking Sets Us Apart
Subscription Value Proposition Framework
The LatentView Subscription Value Proposition Framework is designed to place where the multitude of subscription categories sit according to the value they offer consumers amidst the broader array of choices. While individual brands within categories may have a different placement across quadrants, the category largely sits in a particular quadrant. More importantly, the framework provides both short-term and long-term measures for what companies need to do to strengthen their subscription service offers.
Convenience You Can’t Live Without
B2C Saas Products Replenishment BoxesThe Best With No Regrets
B2B Saas products Luxury Rental/Car Subscription Video Gaming SubscriptionBest Value Bar None
OTT-SVOD/vMVPD Collaboration/ Communication SaasYour Way All The Way
Retail Subscription Meal Plans & Beauty BoxesThe subscription business landscape can be envisioned as a rectangle divided into four quadrants. Different subscription categories fall somewhere among these quadrants based on two factors aligned with the vertical and horizontal axes: “barrier to switch” (vertical axis) and “involvement” (horizontal axis), respectively.
- Barrier to switch refers to how easily subscribers can jump ship based on how many competitors exist and the degree to which a subscription service is delivered digitally. Digital products are easier to switch out compared to a physical product that requires greater effort to switch. As represented on the vertical axis, the barrier to switch goes from very low at the bottom to very high at the top.
- Involvement refers to how much time, information, or money is required for a customer to choose and maintain a subscription service. As shown on the horizontal axis, this goes from low involvement on the far left to high involvement on the far right.
Focus on habit forming (usage)
- Increase flexibility through multiple pricing tiers and/or product add-ons
- Drive convenience and affordability
Longer term focus on offering expansion, entering new markets. Watch out for substitutes or new entrants
Reduce post buying dissonance
- Branding is very important
- Personalized selling
- Customization
- High engagement pre and post sales
- Maximize benefits from the product/service for customer
Longer term focus on product innovation and growth through acquisitions
Focus on value for money
- Build brand awareness to stand out
- Create product and user experience differentiation between company & competitors
- Drive product usage
- Provide incentives/ rewards programs
- Make cancellation/downgrade/pause easy
Longer term focus on owning the value chain or broadening the offerings. Watch out for new entrants
Focus on end-to-end customer experience
- Personalization is important
- Give consumers options to buy additional product (add-ons with sub.box)
- Provide choice to downgrade subscription tier or have easy to cancel process
- Customer satisfaction is important to off set higher price
- Build a community of followers and advocates
Longer term focus on both vertical and horizontal integration. Watch out for new entrants
Barrier to switch
Involvement
The subscription business landscape can be envisioned as a rectangle divided into four quadrants. Different subscription categories fall somewhere among these quadrants based on two factors aligned with the vertical and horizontal axes: “barrier to switch” (vertical axis) and “involvement” (horizontal axis), respectively.
- Barrier to switch refers to how easily subscribers can jump ship based on how many competitors exist and the degree to which a subscription service is delivered digitally. Digital products are easier to switch out compared to a physical product that requires greater effort to switch. As represented on the vertical axis, the barrier to switch goes from very low at the bottom to very high at the top.
- Involvement refers to how much time, information, or money is required for a customer to choose and maintain a subscription service. As shown on the horizontal axis, this goes from low involvement on the far left to high involvement on the far right.
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