On subscriptions and the usefulness of Portfolio research

Subscriptions are hot. You can subscribe to anything these days. I see two social developments underlying this:

The trend from possession to use.

Private lease, Swap bike, Netflix are some well-known examples, where you no longer buy a car, bike or movie, but may use it for a fee. Less known are the lease constructions around furniture (Ikea), washing machines (Bundles) and even mattresses (Bedzzzy). For all these products, you don't spend a large amount of money at once but you can use it through a subscription, as much as you want.

Another trend is making small repeat purchases easy.

If you know you need to eat every day, why not have a meal box delivered? Razors (Shaversclub), flowers (Bloomon), or even toilet paper (TheGoodRoll) are other examples of repeat purchases that you can have periodically delivered to your home. You never run out and don't have to think about it again. Convenience serves man, you just have to take out a subscription.

For providers of these products and services, the benefits are obvious. Customers who choose you make such a choice once and are then tied to you for a long time. As long as you keep them happy the revenue keeps coming in without any acquisition costs. This is a fine business model because if there's one thing entrepreneurs hate, it's uncertainty about revenue.

For marketers, a subscription structure presents both opportunities and challenges. In addition to the operational benefits mentioned, a carefully constructed portfolio offers opportunities to serve a large part of the market with suitable propositions. A suitable subscription for every target group, so there is something for everyone, with the accompanying positive impact on sales. The challenge is to offer a clear and well-constructed portfolio that does justice to the various wishes and needs in the market. Fortunately, research can help with this.

Then it is now time for a personal confession. Recently I bought a car. For many, this will be nothing special, but people who know me know that it is a thing for me. I have always proclaimed that a car - for me - is an unnecessary luxury. But now that in the Covid era, OV travel is less fine and my parents are getting older, at 51 years old, I've changed my mind. Why this confession? Because when buying the car, something also has to be arranged in case I break down along the road, which is not inconceivable given the second-hand nature of my new acquisition. And in doing so, I can choose from a number of subscriptions.

And, yes I chose the middle option. I gladly pay 2.17 euros extra per month for roadside assistance in my hometown, replacement transport and probably I was unknowingly tempted by the 15% discount. In retrospect, I wonder if the entry-level subscription is not enough... within the hometown, our own garage can help us, right?

Optimal portfolio determination

How did ANWB arrive at these rates for the roadside assistance service? Of course costs play a role and also the offerings of the competition, but in addition the value elements of the propositions were considered. Determining an optimal portfolio requires conjunctive market research. Our research for WRTS is a great recent example of this.

At the beginning of my career at Blauw, we mainly did portfolio research for telecom providers. We created balanced portfolios of subscriptions that combined internet speed with value added services, tailored to the needs of the market and differences between market segments. With the prescription of society, we noticed that the topics are becoming much broader, because eventually you can't think of anything or you can get a subscription for it.

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