By Morten Suhr Hansen
The first month of the year has gone by and at Subscrybe, this is the time for us to look at the challenges and opportunities that subscription companies are looking into. The global economy is under pressure and the prioritizations of consumers are also hitting us in the subscription movement.
This is exactly why it is especially important to be aware of the focus areas that could secure your company the competitive advantage this year. And it turns out that there are significant opportunities for subscriptions when consumer trust is weakened and purchasing power is low.
In January, my colleague, Niels Vestergaard, published the Subscrybe Forecast Report 2023, with the purpose to frame the five most important opportunities for subscription companies right now. And many of his points are supported by my conversations and experiences at The Subscription Show in New York in November.
In this article, I’ll dive a little deeper on some of the points from the report and explain, why it’s important as a subscription executive to look it over.
The immediate benefits of subscriptions in a recession
The report states that subscription has two significant benefits to offer when we all have limited budgets. First, subscriptions help us consume more effectively. They do this through meal boxes, home fitness, delivery of beauty products as well as Green Fee models like Amazon Prime and Club Matas Plus. These give us the opportunity to consume just the amount that we need and it saves us time when we are free of grocery shopping or visiting countless shops to collect what we need in our daily life.
And even though the growth optimism is put on hold, one should remember that Danish Goodiebox grew 359% in Germany last year and that the annual market growth rate of subscription boxes is estimated at 17.5%. So even though it is hard to bring in new subscribers right now, we must remember that subscription boxes and other convenience subscriptions are still growth markets.
Furthermore, the need for product subscriptions that let us subscribe to computers, glasses, cars and bikes when we need them is growing. These subscriptions can save us a big payout, even though we have an acute need for a specific product. This could be a bike for getting to the office or a new computer for a student who is facing a big assignment and needs equipment that works. For example, the market for car subscriptions like Dribe is expected to reach $100 billion dollars globally in 2032.
The recession presents new opportunities for young brands
As you may know, an economic downturn gives consumers the opportunity to reconsider that brands and companies that they have a relationship with. This could result in a cancellation, but conversely it can also result in consumers seeking new ways to satisfy their needs. This presents a unique opportunity for growing your young subscription brand. When the consumer is in consideration mode, it’s important that you’re ready to catch their attention right away.
However, the report also states the areas that must be in place, if you have an ambition to challenge a market leader in your field:
Is your data insight strong enough? Are you able to collect the necessary data from your marketing and onboarding, so you know what works and what doesn’t?
Is your value offer sharply defined? Is your subscription offer recognizable, easy to understand and attractive to buy into?
Does your pricing fit the current market? If your price isn’t exactly right, you might be left behind. How are you going to present and talk about your price?
Is your digital infrastructure prepared for growth? One of the most common challenges we see with our customers, is that their infrastructure is not ready to handle a lot of new customers. More often than not, it can pay off to invest in infrastructure that works before you start your marketing machine.
A final reminder: Onboarding is a key activity
I’m also glad that Niels has highlighted the importance of onboarding in his report. When I look at the subscription companies that are best at retaining subscribers, it’s almost always the ones who understand the importance of welcoming subscribers and who make sure that the subscriber succeeds in the first meeting with the product or service. This was also a very hot topic at the conference in New York and there seems to be agreement on the importance of strong onboarding efforts.
If you’re not already proud of your onboarding and have a team member responsible for this area, it’s very likely that you might get left behind in 2023. Right now, it’s more important than ever to get subscribers onboard, because the decision to start a paid relation is harder than ever and therefore, you must reward the subscribers who wishes to start a relationship with your brand.
Download the report and get ready for the new year
I’ve only brushed upon a few of the insights in the report and I strongly recommend that you download the entire PDF here: Subscrybe Forecast Report 2023
It’s more important than ever to stay sharp on the developments in consumer behaviour and here, you have a great starting point for the coming year, whether you’re an experienced subscription company and you’re about to grow your new subscription venture!