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A Deloitte study: Unpacking Subscription Models, The Next Frontier in Customer Experience



In our rapidly changing business landscape, the buzz around subscription models is increasingly resonant. Deloitte, a leading global consultancy, recently conducted a study revealing interesting aspects of this trending business approach.


The findings underscore that 42% of customers remain oblivious to their involvement in subscription models. This suggests that the growing subscription model excitement isn't necessarily customer-driven; it's propelled more by businesses. It's also worth noting that more than half of customers express a preference for the pay-as-you-go option over a subscription. These insights posit subscription models as more of a business novelty rather than a customer need.


Despite this, customers still opt for subscriptions when presented with clear benefits or when they lack alternatives. Indeed, subscription models often outshine one-off purchases in providing customer advantages. The Deloitte study highlights these key statistics:

  • 45% of customers identify financial incentives as the primary factor influencing their subscription decisions.

  • After subscribing, customers reported a decrease in time spent using similar services.

  • Interestingly, 75% of customers escalated their expenditure on specific categories post-subscription.

These indicators confirm that subscription models aren't solely about competitive pricing but also encompass other enticing factors. The convenience and access to exclusive products or services that these models provide are pivotal. Given the high customer acquisition cost, being a subscription vanguard can offer a definitive edge.


Similarly, a more attractive price could prompt a customer to consider switching subscription providers or adding another provider to their list. Countries with lower digitalization rates are prime grounds for new subscription ventures to establish market dominance ahead of competition.


Interestingly, the rising shift in customer expectations toward personalized experiences and instant benefits is also driving subscription model popularity. Traditional loyalty programs often fall short in this area, but a well-structured subscription model can keep customers engaged while stimulating regular and increased spending.


As subscriptions continue to gain momentum, we're likely to witness a demand for more integrated customer experiences. Consequently, service providers will experiment and transcend their core business. Emerging ecosystem models that encompass core, adjacent, and transformational use cases could well be the next evolution of subscriptions.


Key Takeaways

  1. Businesses drive subscription models more than customers. But a combination of financial incentives, convenience, and exclusive access can entice customers towards subscriptions.

  2. A well-designed subscription model can effectively replace traditional loyalty programs, leading to increased customer engagement and spending.

  3. The future of subscription models likely lies in an integrated ecosystem approach, combining core, adjacent, and transformational use cases, thus enhancing overall customer experience.

Download the full report here

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