Subscriptions will drive the brand agenda in 2019

In the desire to innovate and be quick to change companies are creating disruptive models. While speed and efficiency are gaining priority, customer trust is at an all-time low. Some of the disruption is caused because a new technology comes in and the company stops supporting the previous one. Customers are forced to either invest in the new product or live with an unsupported product. Therefore, no matter what the company may do in terms of path-breaking strategy, it may not achieve the intended goals of better reputation management, risk management and better brand positioning.

Take the case of almost every gadget you own. Phones, air purifiers, washing machines, televisions, computers, it’s a long list of things where the use and discard economy functions. Obsolescence is built into many of the products, especially electronics. When the economy is booming and disposable income high, a constant re-purchase cycle may function well; not so in times of a downturn.

The other big concern is the enormous amounts of electronic waste that companies are now being asked to factor in as part of their business models. Governments and consumers are equally concerned that the perpetual purchase cycle also needs to factor in constant waste management.

Long term support models like the recent case where Apple replaced batteries of over 11 million iPhone users worldwide points to an emerging trend. The customer and brand interaction which ends after purchase, is now seeing a rework towards longer journeys. Continued service and support is a significant opportunity for the brand to stay in the customer ecosystem, build trust and loyalty.

The linear customer journey – Build, Communicate, Sell, Service, Discard
Is changing to
The circular customer journey – Build, Communicate, Sell, Service, Communicate, Take Back, Re-sell / Recycle

Take the case of printers. Printers have mostly been sold at a lower cost because companies felt that the printer cartridges would make more money for them. They further persuaded customers to buy original printer cartridges and discouraged refilling through IP protection of the printer. However, obsolescence was always in-built into the model. Printer repair was almost prohibitively expensive with parts of older printers costing as much as a new printer. This discouraged repair and customers were made to buy new printers at regular intervals with newer types of cartridges. Additionally, customers had no easy way to recycle, so the cartridges and printers mostly went into a garbage dump.

Could this change to a better way of doing business?

  • Customer buys a printer with cartridges that allow refill and re-use
  • Printers can automatically order supplies through a subscription model
  • Printers regularly serviced and repaired if needed
  • Damaged printers and cartridges can be taken back by the company and recycled

Customers need a regular supply of printer cartridges and quality printers. Can the customer journey be eased with a new business model? A simple, sustainable subscription model which redefines the connection between the company and the customer.

Subscription models which support convenience, personalisation and a constant conversation will emerge stronger in 2019.

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