“One thing I love about customers is that they are divinely discontent. Their expectations are never static – they go up. It’s human nature. We didn’t ascend from our hunter-gatherer days by being satisfied. People have a voracious appetite for a better way, and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary.’”
Then-CEO Jeff Bezos wrote those words in a 2017 letter to Amazon shareholders. His message perfectly encapsulates the customer experience. What works for them today might not work for them tomorrow. That couldn’t be more true for businesses with recurring relationships like subscriptions with their customers. A new report furthers this point. The Subscribed Institute, in partnership with The Harris Poll, surveyed 2,084 adults in the U.S. to share their consumption habits and preferences. And what do they want? Options. Lots of options.
A supermajority of respondents (80%) said they consider flexibility in pricing and package options important, very important, or absolutely essential. They want the option to pay in a number of ways, including:
- Monthly flat fees (50%)
- Annual flat fees (40%)
- Limited free trials (28%)
- Discounted or free access in exchange for ads (25%)
- Usage-based fees (22%)
We’ve spent a lot of time recently talking about usage pricing as an emerging model. Not everyone wants to pay recurring fees for a product. Instead of missing out on their business, this model could be a way to get these customers through the door. Digging deeper into the data from the report, we found another reason why it makes sense: It’s the future. Nearly one-third (32%) of Gen Z respondents said they want to pay for what they consume.
And what about bundling vs. unbundling? Almost half (48%) of respondents said they prefer bundled services, compared to 30% who want à la carte offerings. The deciding factor comes down to what’s cheaper and/or perceived to be the more valuable of the two.
Two more findings caught our attention. The first is an all-too-familiar experience for many of us: More than a third of respondents (36%) said they’ve canceled and then rejoined the same service within a year, which indicates a desire for flexibility and control. And the second finding proves as much: 78% of respondents said they’re interested in the option to temporarily pause a recurring service instead of canceling.
This report helps us understand where the market is and where it’s headed: Consumers are unique and fickle. They want different and multiple offerings from businesses. That’s not changing, but we also should be mindful that this is a snapshot in time of consumer sentiment. As Bezos once said, “expectations are never static,” so don’t take this report and build a roadmap around its specific findings.
Instead, be prepared for anything by adopting a new business approach — a strategy and modular monetization platform — that can handle and match the ever-changing demands of consumers as they happen. That way what consumers want never becomes a burden, because you’ll be able to provide it seamlessly. If you’ve been reading this newsletter, you know that approach is called Total Monetization.
Total Monetization is the answer to this market shakeout. Businesses that understand and can deliver to their customers exactly what they want won’t just survive the shakeout; they’ll dominate the market.
This is the seventh installment of the Total Monetization Series. We’re challenging companies to move beyond one-size-fits-all pricing models and craft a dynamic mix of offerings and business models that meet ever-changing consumer demand. This customer-centric and future-proof approach can unlock recurring growth and give modern businesses staying power.
Stay tuned for more conversations about Total Monetization. We’re just getting started and have so much more to cover. See you next time.
