Direct to Consumer Subscriptions: The New Marketing Disruptor

Eight key elements successful subscription marketers focus on.

A bombshell has exploded in consumer buying behavior.  Moving away from one-time purchase and donations, consumers are increasingly moving toward the subscription or sustained-giving model.

For marketers, this shift opens the door to a new set of revenue opportunities.  But it also means some fundamental changes in how we market.  The subscription model that was once the sole province of book publishers and CD/DVD clubs has now gone mainstream.  Marketers in all industry verticals are awakening to a significant change in consumer preferences and buying patterns.

Today’s consumer desires a stronger relationship between their needs and brand offerings. The millennial consumer has already demonstrated their affinity to brands that provide the high level of convenience offered by subscription services.  

Look at the Dollar Shave Club as a case in point.  The five-year-old razor and blade start-up used creativity, technology-and an effective subscription model-to disrupt a multi-billion dollar industry, thoroughly.  When Unilever paid $1 billion for the company in July 2016, it was a wake-up call.  

The meteoric rise of the Dollar Shave Club demonstrates to marketing organizations that the time is now to transform their thinking and channel strategies to embrace a business model that engages with prospects and customers in a new way.  

In virtually every industry, vertical subscription business models are expanding and growing in popularity. A record number of brands have introduced new weekly, monthly and annual services.  Just look at the Over the Top (OTT) streaming video and the disruption it is causing in the cable television world.  And consider GM’s new “Netflix for cars” subscription offering for Cadillac, whereby consumers can swap out Cadillac models 18 times a year under $1,500 per month subscription plan. 

The key to success with a subscription relationship with consumers has its foundation in a robust and flexible ecosystem that integrates seamlessly at each customer touchpoint with a brand. Brands must understand the role of creative design, competitive offer development, messaging optimization and targeted media strategies as mission critical components of building a successful and profitable relationship with customers.

Successful subscription marketers focus on the following key elements:

  1. A subscription ecosystem that is stress-tested to scale.
  2. A succinct and clearly communicated value proposition.
  3. Deep experience in the mechanics of subscription marketing, and a willingness to access outside expertise if needed.
  4. A strong introductory offer.
  5. Properly timed subsequent shipments.
  6. Compelling creative that focuses on conversion and retention.
  7. Risk mitigation through cost-per-acquisition media options.
  8. Specialized technology that provides all the necessary components and delivers them seamlessly.

While the benefits of the individual sale are clear, it is the subscription model that inherently supports the potential for building and sustaining lifetime value of the customer. In a highly competitive marketplace, a business model that opens up a direct to consumer channel must be a key component of a revenue driving strategy.

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