By George Farris
Do you remember reading print magazines? Cosmopolitan, Sports Illustrated, Time, Newsweek and others?
One of my favorites was Psychology Today. Many of the articles were written by psychologists, psychiatrists, sociologists, medical doctors aimed at helping you solve your mental health and emotional issues. So, I wondered, why do they put so many of those #**%@!! loose subscription postcards inside their magazine?
Every time you tried to read the magazine, a subscription postcard fell onto your lap, then the floor. You stop, pick it up, set it aside, turn the page and it happens again and again and again. Up to six cards. “If they want me to feel better, why do they aggravate me this way?” I silently screamed.
A friend of mine sold ad space at a major magazine. So I asked him why magazines use fall out cards.
“They work,” was his answer.
Today, print magazine readership is drastically down. But the subscription business model the magazines adored is more popular than ever. It’s being used in markets and industries that cover many categories.
Most Americans are familiar with subscriptions to Netflix, Apple Music or Amazon Prime. B2B might think of Salesforce.com. I wrote about the growing trend of subscription boxes for clothes, toys and beauty products four years ago and that market has continued to grow.
WHY USE THE SUBSCRIPTION MODEL?
Businesses embracing the subscription model find it not only helps retention, it also helps to increase revenue. Recent research from Zuora found that subscription business sales have grown substantially faster than two key public benchmarks – S&P 500 sales and U.S. retail sales.
According to a survey by McKinsey & Co., 46% of American consumers already pay for an online streaming service and 15% have subscribed to an e-commerce service within one year of the survey.
If it works for Netflix, why not other service and product suppliers? So now there are subscriptions available for airlines, gaming, education and professional development, home maintenance services and more.
One of the biggest subscription hits is In-home Fitness. Helped by the pandemic stay-at-home situation, In-home Fitness rolled out the subscriptions and won big.
Fortune Business Insights reports the home fitness market size is projected to grow from $10.73 billion in 2021 to $14.74 billion in 2028. Peloton, Fitbit, Mirror and Tonal are the winners in that market so far.
AUTOMAKERS EMBRACE MODEL
Sounds weird, but think about it. According to Garyfox.co, “Instead of deciding which car to purchase, people can now use rental subscriptions and change what they drive, giving them access to different vehicles. Subscription models give customers the feeling of owning many different products without the cost, responsibility, and clutter of buying them. The average car spends around 90% of its life parked. A shift away from privately owned vehicles toward a service – owned and run by public or private ventures is the future.”
Audi, Porsche and Nissan already have subscription services. All three offer consumers one less thing to worry about. Audi even has a slogan for its subscription service that promises “All of the power. None of the responsibility.”
Marketing professionals should look into using a subscription model now – no matter what type of business you are marketing. It may be a good way to increase sales and retain customers. But please, don’t use those #**%@!! subscription postcards.
George Farris is CEO of Farris Marketing. Email gff@FarrisMarketing.com.