Subscription Model Note: Concierge Medicine, Supermarket…
By Jason Moriber • Jan 22nd, 2009 • Category: Insight & AnalysisI heard this news story on NPR this morning on Concierge Medicine, another example of the subscription model which seems to be gaining ground. It’s my feeling that the subscription model is the trend to weather these rough economic times. It allows the provider to plan ahead, ideally for a year at a time. Even if initial revenues are initially lower, the security of knowing who your customers are and for how long increases efficiencies within a business, and will lead to increased profits over time (and better customer relationships).
What if supermarkets followed this model? Paying the market a monthly fee, signing up for an annual package. They put your credit on your shoppers card, let’s say with a 15% discount off of ticket prices. Then you could shop as normal, checking out using your shoppers card, you’d save a bundle, plus the market could plan better, possibly bringing prices down as efficiencies grew? The local gas company offers a flat-rate monthly payment, what other industries could benefit?
Jason Moriber is a veteran product/project/marketing manager, underground artist/musician, and online community developer, Jason expertly builds/produces/manages clients' projects, programs, and campaigns.
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Good idea. In a down economy more companies need to experiment with price framing — positioning the “value” of the real price in different ways against some other reference price. Subscription models are a great way to lower the perceived price pain + build loyalty. The best part of the concept is it creates an opt-out dynamic, where consumers have fewer decision points and the one in question is whether to diss the service.
Of course my Netflix subscription was still too damn high vs. the value so I cancelled it.
I would suggest any industry with perceived price pressure, and where consumers shop at least 6x a year, consider a subscription model: Regional arts programs, theaters, sandwich shops, coffee shops, shoe stores for kids (really, I think in the early parenting years I dropped 10% of my income on that), family restaurants, movie theaters, etc.
One barrier to the model is people don’t want to manage too many subscriptions, so an aggregate service that combined numerous features might work. Imagine a bundled subscription for all your food out including McDonalds, Dunkin’ Donuts, Applebees, elementary school cafeteria, and grocery store — $200 a week, all inclusive.
Just don’t mention it to Twitter. I like my social media free.