Subscriptions are a tactic, not a strategy.
Whether you’ve noticed it or not, there has been a seismic shift in the way business is conducted. It’s gone from purely transactional, to almost entirely relational. Because of this, brands are no longer competing only for attention. They’re now competing for loyalty.
At UNBRKBLE, our starting point with potential clients is usually a discussion centered on their desire to build a subscription-based offering. Sometimes the curiosity around subscription comes from a top-down mandate, other times it is a strategic shift in business models, and in other instances, it’s seen as an opportunity to rethink how a company delivers against specific value propositions.
Through these discussions, it typically becomes clear that what they are really seeking is brand loyalty. But they’re almost always operating from the perspective of the business — rarely from the lens of the consumer.
Our response is usually grounded in a single core belief: subscription is a tactic, not a strategy.
Here is a look at our process for designing consumer-centric solutions, and how we think about the bigger strategic question.
The bigger question
The bigger strategic question is this:
How do we build deep, trusting relationships with our customers? And how do we leverage their loyalty as a flywheel for growth?
Zooming out for a moment, think about the people you love and trust the most. Those relationships probably weren’t built overnight, and those people probably aren’t in your life only because they’re good back scratchers. It takes time to build trust. It’s earned through consistency, and it goes both ways. It’s in the mutual demonstration of care, respect, and love that allow relationships to flourish.
Zooming back in, now think about the brands you love the most. They don’t just sell you products. They likely enable something within, or for you. They unlock your aspiration. They’re there for you when you need them, they demonstrate shared values, they respect and care for your needs, and they empower you in ways that other brands or products don’t. As a result, you’re much more engaged in what they have to say or offer.
In business, these types of relationships are worth exponentially more than any passive customer. This kind of loyalty is what every brand longs for, but getting there is about much more than the business model.
Reflecting on Vinyl Me Please, it is a record of the month club, yes. But we never set out to build another box of the month club. From day one, our singular goal was to bring people together under a shared passion for music. We didn’t like how music was being commoditized so we set out to craft an experience that led to a deeper, more meaningful relationship with music.
We chose vinyl as the medium and subscription as the model only because they enabled the type of experience we wanted to create — not the other way around.
We had just 12 paying members in our first month. We instinctively knew that serving those 12 people would be the best way to recruit more people to the service. So we went above and beyond to ensure they each had a positive experience. We engaged and connected with them on a human level. We shared playlists, talked about what the community members were listening to, invited them to listening parties, and gave them insights behind the scenes of what we were trying to do. Sure enough, those 12 people told their friends, and those people told their friends, and so on.
The flywheel was built, not because of our model, but because of our intentional approach to building trust, and establishing relationships with our early customers.
Moving from linear to relational
Many of the businesses we work with are already experts in their own linear model. They have a defined way in which they sell products, and it usually works to that end. In this model, the brand tends to be at the center, and the focus of these organizations is often on generating more leads, filling their top of funnel, improving conversion rates, driving LTV by encouraging upsells, and so on. We’ve all had these types of consumer experiences. We know what it feels like to be sold to, and what it feels like to be seen as a walking dollar sign. Sometimes these types of experiences are necessary (like buying a car), but they also tend to be the most difficult consumer experiences. This is often what’s fueling their curiosity behind a subscription-based offering.
Conversely, in a relational model, greater emphasis is put on building empathy for the end customer. It’s through this process that a brand can develop a deeper understanding of the customer’s unmet needs/desires and the problems hidden beneath the surface. The relational model is intentionally designed to offer experiences that support and connect at an emotional level, while still solving an objective need.
Pointing to Nike Adventure Club, for example, Dave and his team originally set out to solve an objective need for runners: easing the pain of replacing running shoes every few hundred miles. As they began to build empathy for their target customers, what they uncovered was a bigger problem, and arguably a bigger opportunity: solving the hassle of shopping for fast growing kids. But they didn’t stop there.
Through additional discovery, they realized the plight of parents was not just in buying shoes, but in how they perceived themselves as providers. Dave and his team saw how bogged down parents were with the traditional shopping experience. They observed the stress parents felt when they realized their kids had grown out of all of their shoes, and the pain they felt when they couldn’t find the right shoe, much less something their kids liked.
This insight helped Nike Adventure Club realize it had to do more than just sell kids shoes through a new model. They had to help parents be better parents, while simultaneously empowering kids.
This is the mindset of a relationship brand. They listen, adapt, conform to the needs of the consumer, and provide connection that transcends pure utility. This helps build a virtuous cycle that has the ability to turn an average customer into a raving fan…and creating raving fans is the best way to create more raving fans.
It sounds simple, but it’s not easy
So what does all of this mean? How can you build deep, trusting relationships with your consumers? Before we share our approach, here are a few principles to ground your perspective:
Look beneath the surface: Building deep, trusting relationships requires a nuanced approach. It’s critical to look beyond the business model, and to truly understand which problems and unmet needs or desires your consumers may have. Be proactive in getting this information (don’t simply wait for feedback to come to you), and be sure to look for the emotional need, not just the objective need.
Be human: Be authentic, and seek to connect at the human level. Incorporate empathy into your innovation and design processes. Be conscious of friction within the experience, find ways to add value (without asking for more money), and evolve alongside your consumers.
Retain and win: Retention drives loyalty. By focusing on providing an exceptional experience for your existing customers, you’ll gain an army of loyalists that will be one of your most effective marketing channels. Here’s a handy equation for arriving at retention:
The whole is greater than the sum of its parts: “Customer experience” is the cumulative perception (emotional and cognitive) your customers form as a result of their interactions with your brand. This includes every possible touch point, direct or indirect. To build deep relationships, the whole organization needs to be aligned around the consumer and their needs.
Three steps to deeper relationships
Of course, the above principles don’t necessarily answer the bigger strategic question (and the answer to that question is ultimately going to be different for each business, industry, and target consumer). To arrive at the unique answer for each of our unique clients, we use a ‘test and learn’ approach to glean insights that help us clarify the who, the what, and the how. It looks like this:
- Explore
We recommended getting in front of your target audience and having long-form, open-ended discussions. The goal of these conversations is three fold: First, you want to develop (or sharpen) your understanding of these consumers. Second, you want to seek out the unmet needs that sit beneath the surface. And third, you want to define a set of insights you can reference as you move through the rest of the process.
If you’re an established brand looking to expand or refine your existing offering, the exploration can be centered around how else — or how better — you can serve consumers. If you’re starting up a new venture, the exploration can be centered on identifying opportunities within a specific market, industry, or domain.
2. Experiment
Once you’ve got an understanding of these unmet needs, you can begin developing hypotheses and designing potential solutions. Don’t waste too much time (or money) here. We like to present a series of low fidelity MVPs, concepts, or prototypes. We’ll usually present potential pricing models to support these things too.
You’re still in fact-gathering mode here. Your explore phase insights have helped develop hypotheses, and the experiment phase is about validating those assumptions with tangible stimuli. It’s common for us to evolve concepts in real time, which accelerates the learning process.
3. Validate
Whereas the prior two phases are largely based on “say” tests (i.e. prospective users telling you what they think), validation ultimately requires a person to take action against something. The validate phase is when we move into “do” tests.
We’ve accomplished this by building higher-fidelity MVPs (think landing pages, marketing sites, etc.) which incorporate all that we’ve learned to date, paired with some kind of call to action (i.e., email capture, payment, sign up/subscribe, etc.). The work is not finished here — there will be much more iteration to do — but getting that first set of users to commit is a critical part in validating the overall concept.
This process can repeat itself as the variables are reduced and the unknowns become known. Throughout, the critical questions you’re trying to answer are:
- What is the need?
- What are the necessary resources, capabilities, and skill sets needed to deliver against that need, and is that something we reasonably support?
- Can we build a business model around it, and will it help us accomplish our business objectives?
The sequencing here is important as answering the first question helps dictate how you look at and answer the last two questions. It puts the consumer at the center, and helps build a relational model, without forgetting about the business objectives. Going the other way tends to be more linear, and often results in a solution that doesn’t have a clear need.
From this purview, you’re better equipped to build (and then leverage) loyalty amongst your consumers. Sometimes it’s through a subscription-based offering, sometimes it’s not.
