Unlocking the Secrets of Subscription Services: A Guide to Understanding Consumer Behavior
Subscription Services/Support Plans and the nuances.
About this article
Are you maximizing the potential of your subscription services? In today’s informed consumer landscape, understanding the nuances of subscription models can make or break your business. Let’s delve into the fascinating world of subscription services, exploring the mental models and challenges that shape consumer decisions. This article is a compilation of my learning about subscription services and products.
Customers of today are informed, period!
Modern consumers are savvy. They know about limited-time warranties and free service plans that often come with their purchases. However, what truly matters is the ease of discovering this information.
Awareness of included service/plan propels the users straight to evaluation mode of individual upgrade plans/options and their distinguished incremental offerings, evaluating what makes it good/better/best. While the prominent notion is “I’m good with the included plan, or something that doesn’t cost me anything extra. I’ll probably buy if need be.” This mental model has gained traction from massive electronics warranty/support businesses and try-and-buy models of product/service-based industries.
The electronics warranty/support business has a manufacturer’s advantage, and buying a support plan from the manufacturer is the customer’s preferred choice. Alongside brand privileges, it also satisfies the customers’ sentiments of trust, minimizing the scope for what-if situations. Despite extensions/upgrades being optional, the brands should practice demonstrating the distinction clearly and save users time figuring things out.
For the consumable subscription businesses(for example — a weekly delivery of eggs), the user’s behavior is slightly different. It is heavily need-driven, instant, price-sensitive, and competitive. The concept of trust is directly proportional to a competitive price. But no matter the difference in business model, the brands should practice demonstrating the distinction between basic subscription v/s upgrade options.
What are user behaviors when buying support plans?
For the users, any purchase decision with its benefits or uncertainty of its utilization in the future is worth delaying or risking. Such is the pattern with services/insurance and support plans. All humans tend to rethink or risk not extending a support plan/insurance/term plan, etc., comforting themselves of being cautious enough to get into any unforeseen situations. Have you ever upgraded your laptop support plan before its expiry? Or are you one of us who regretted not buying it when asked to pay a hefty repair fee? Did you renew your vehicle’s insurance yet?
Users are price-sensitive, making it extremely important for the brands to do a great job of developing context and showcasing the benefits of their purchase in the long run. Communicate with them through real-life incidents like spilling coffee while looking after a child. No matter the goodness of the support plan, price is the deciding factor for the majority.
Monthly payments or EMIs v/s One-time payments are great alternatives, but the drive to select depends on how easy it is to locate, understand, and calculate the pricing options. Any scenario of murkiness in pricing information is an easy trigger for users criticizing the brand for inconsistencies in pricing.
Comparison model of buying is a door to purchase completion. Simplify and visualize your comparison metrics to drive scan ability!
No matter the type of product, people love to compare and buy.
The same applies to support plans, term plans, insurance, etc. Different plans or options are considered distinct products. For the users to pick one, the comparison should be incremental, simple, organized, engaging, speak their lingo (usability heuristics — match between system and real world), and be well defined. Product features are major “not for me” decision triggers. Brands should create their products in such a way that the majority of offerings fit the target audience or prompt users as must-haves. Learn from the fact that users are more exposed to eCommerce sites. Picking patterns from eCommerce should be an insight for brands to treat their support plans or service options as distinct products and top them up with best marketing practices.
My closing note with the Do’s.
When crafting subscription-based services, astonish your users by placing their needs at the forefront. Ensure that details about subscription plans are not just easy to find, but practically jump off the page. Set your offerings apart by making the differences between basic and premium options crystal clear. Showcase the long-term perks of subscribing through relatable scenarios that showcase your service’s value in a way that leaves them nodding in agreement. Cater to diverse preferences by offering flexible payment choices that suit their needs. Simplify the comparison process so much that they can’t help but be impressed, avoiding any hint of confusion or complication. Price transparency is key; obscure pricing could turn them off in an instant. Build trust by offering competitive and straightforward pricing, especially in industries where consumers are particularly sensitive to cost. Finally, acknowledge that your users are savvy and may hesitate if the benefits aren’t crystal clear. Offer them a compelling reason to subscribe that they simply can’t resist.
Do write your feedback, view points in the comments section below. Don’t forget to like and share this article to your fellow product teams. Cheers until next time. 🙂
Go and renew your vehicle’s insurance now?
