There are two important things happening right now that when combined have a powerful impact on business. They are the ‘Subscriber Economy’ and the ‘Gig Economy’.
The Subscriber Economy is the fast-growing trend towards paying monthly for a service instead of expensive purchase upfront.
The Gig Economy is one in which people work temporary or part-time jobs that do not provide traditional benefits such as pension or healthcare but deliver benefits around flexibility.
Consumer purchasing behaviour is changing and it is changing for good. It is happening in our work and our personal lives. Think about how you used to watch a movie…video rental from Blockbuster? Buy a DVD from HMV? Not likely any more. If you’re like me and many others, your movie is downloaded or streamed on demand; your music is from a subscription service…paid for monthly for all you can eat; no more buying CDs or DVDs (hardware!) up front. The same for cars (lease or PCP vs purchase), shopping (Amazon Subscribe and Save), the list goes on.
This transitions into business as well and is relevant to every size business and every industry.
Relevance is critical. Any business that doesn’t stay relevant to their customer or relevant in their industry is dead in the water, you are the Blockbuster of tomorrow. How do you stay relevant? You must embrace digital. I believe that you are either (a) born digital, (b) transforming to digital or (c) dying out. Which are you?
In the past, traditional sales and marketing found a channel to market, which led to cash up front, happy sales person and benefit to the P&L. The customer walked away and if they were lucky, got a phone call a year later when they churned or appeared on an outbound campaign. Single product sale, no relationship and no real trust. This is the Old Game with Old Rules.
Today’s customer isn’t specific to one channel, they engage with all channels. They will not pay large sums up front, expecting to pay monthly at a rate they deem reasonable. This also means that as a monthly subscriber, they are free to leave at any time. And they will.
Now this does two things: first it means you must focus on creating a bond between you – TRUST is the bedrock of everything. Second, it means constantly reinforcing that bond by repeatedly engaging with the customer and CONSISTENTLY ADDING VALUE. That’s right, value has a time limit. What had value at the initial purchase does not necessarily retain that value forever or in some cases for long. It is our responsibility to understand what the customer values today, tomorrow and in the future and then meet or exceed that for them.
The other key thing here is EFFORT. Extensive research carried out by CEB evidenced that whilst customer satisfaction is important it is not as important as customer loyalty. Loyalty means that the customer stays with you. What drives loyalty? Effort. Specifically, low effort. In other words, if you build a relationship, earn your customers’ trust and consistently deliver value, whilst asking very little effort of them in return…you have a satisfied, loyal customer. Easy!
And The Gig Economy..?
So we have customers increasingly wanting on demand services with a great experience and we consider this alongside the Gig Economy and the people in our business…
Temporary work ‘gigs’ can be controversial depending on your perspective but it is a fact the numbers of temporary or part-time workers is increasing. An American report by Intuit predicted that 40% of workers would be contractors by 2020.
So What Do We Do?
The key is to think differently. We must work for our customer, not sell to them. We must embrace a cultural shift across the business where everybody is working towards delivering
- great outcome and positive experiences for our customers
- services that are available on demand, not when we’re ready to sell them
- mobility – this is critical – available anywhere
- repeating value through services, support or advice
To do this means thinking about meeting customer needs not selling products. It means building a relationship, not one-off sales. It means pricing the value of the service to the customer, not a cost per unit sold. This is the New Game and New Rules.
Bringing It Together
In a world where the people in our business are increasingly transient and our customers want the best services right here, right now, providing subscription based services is inevitable. Using the Where shared compute and storage resources are accessed as a service (usually online), instead of hosted locally on physical services. Resources can include infrastructure, platform or software services.... to provide the very latest technology and only paying for what you need, when you need it is rapidly becoming the best choice for businesses and customers alike.
For a business, buying computers, servers and software in a capex model puts pressure on cash flow and leaves you with depreciating assets. Using cloud infrastructure and software means paying for what you need, when you need it and turns this into a more manageable opex model.
This same principle is also the basis for what we provide for our customers. Selling and walking away is the Old Game, Old Rules. Building trust and developing a mutually beneficial relationship is the New Game and providing customers what they need and removing what they don’t are the New Rules.
Which game are you playing?