Get insights into the newest customer-centric business mantra based on the subscription model
You no longer need to own that tuxedo, or the expensive cocktail dress you have been eyeing or even the jazzy sedan. Subscription, or pay-as-you-go models, are changing the way people thought about property and ownerships. The idea of subscription is nothing new. After all, we are used to paying monthly fees for our newspapers or gyms. But what has changed is the outlook of this generation about owning assets, and the rise in new business models that have emerged to cater to changing customer preferences.
The subscription tsunami has shown its early signs in India too. Consider Bengaluru-based online furniture rental start-up Furlenco, which offers premium furniture starting at R1,000 per month. Or Flyrobes, where you can rent everything, from a wedding lehanga to honeymoon dresses. Or car rental platform Zoomcar or Revv, where you can rent luxury cars or hatchbacks. Then there are Amazon Prime and Netflix, which are steadily making inroads into India.
These programmes are successful because they deliver two things—predictable revenue and loyalty. By definition, companies that offer these programmes are in the pay-as-you-go business, which is very much like a subscription model. For example, it makes sense to register for a frequent shopper programme or a car rental company because of the benefits it might offer compared to non-members. Imagine a car getting delivered to you with your radio stations programmed, seat preferences preset, temperature control exactly the way you like, in addition to registration and insurance being digitally installed in the car’s software. There is no business that doesn’t have the potential to be impacted by these changes. If car rental companies, airlines and e-commerce players are all eyeing the subscription model, there is little doubt that other businesses will try to do the same. It is a foolproof method to expand your business and make it accessible to customers, who otherwise may not have been in your target market. It is this shift that Nick Mehta, Dan Steinman and Lincoln Murphy explain in their new book, Customer Success.
The book explains in detail the shift towards subscription economy and the transformative power of customer success. It provides guidance for developing a recurring revenue business by addressing the shift towards subscription economy. Subscription is no longer restricted to software-as-a-service (SaaS) business, but every business in the world is thinking how to become subscription-based. The reason—loyal customers stay with you and buy more from you. The focus is shifting towards consistent, positive customer service. Instead of focusing entirely on increasing new customer base, companies are focusing on monetising and growing a dedicated base of subscribers. Companies are no longer seeing ‘customer success’ as a separate function within a business, but simply as part of the way they do business. Customer success is the foundation of a future that runs on subscriptions. It is not about keeping your customers happy, but driving high lifetime value (LTV) via retention with upsell and decreased churn. And thus, creating loyalty.
The book does a good job of covering key metrics and has important lessons in building a customer-centric company and transforming customers into your biggest advocates. Read this book for the why and what of customer success.