Everywhere I look
lately there seems to be a new, subscription-based model sprouting up around
me. Dating sites. Job search sites. Deal books. Flower delivery. Coffee Shops. The
old adage that humans are creatures of habit seems to be in full affect here.
And for businesses, habit can look a lot like loyalty.
Let’s take the subscription
coffee shops as an example (I’ve heard of three new ones in the past week). As
a coffee-a-day consumer (necessary clarification: as a buy-a-coffee-out-a-day consumer) I can instantly see the economic
value. The “membership” concept is clearly a financially beneficial one, but the
success of these models extends well beyond that.
I believe there is
a level of comfort implicit in habits that individuals are looking for these
days. Beyond just convenience (we know we’re all looking for that), the predictability
of routine seems to offer some grounding. On a local level, it might also suggest
a sense of community (I know I feel like New York gets a lot smaller when my barista smiles, says good morning, and has my
order waiting for me by the time I get to the register). Capitalizing on these desires
is a smart move for businesses, and likely works because of the value exchange that’s
at play. In the case of coffee shops, at least, they’re solving for a daily need
that their customers have: to walk the same route, hit the same café, get their
same drink, and (presumably) have it all go smoothly without even the need to
take out their wallets.
The upside for business,
of course, is the pre-payment and easy upsell potential. If you’re getting me
in the door every day because I’ve already paid for my coffee with you, convincing
me to buy one of your muffins or scones is much easier (I’m already at your
counter, and you didn’t even have to use a dude on the street to lure me in!). There’s
also the gift-card phenomenon: I’ve already paid for things that may or may not
every even get cashed in on. For all the times I’m traveling or have a morning
meeting that takes me a different route, you’re getting my morning coffee money
anyway. Granted the margins on coffee (if we’re sticking to this one example)
are so insanely high that you’re going to be able to offer me a super
competitive price and still make out very well for yourself.
The one caution –
or suggestion – I would offer to these subscription-based models is: Keep it
fresh. As much as we all appreciate the ease of our daily routines, I believe people
still want to be challenged. They want to be kept on their toes, at least
sometimes. So create the opportunity for that. Throw in unexpected specials,
and encourage them to try something new (because you’re making it so easy and
available!). If we consider this equation as value-exchange transaction, then
it’s the responsibility of the business to push their customer envelope. And
maybe it’s just a little. But if I come in every morning for my pre-paid, large,
black coffee with one Splenda, offer me a free pumpkin-spiced latte on October
1. Or give me information about a barista class that I wouldn’t otherwise know
about. I don’t have to take you up on either, but you’ve made the effort. And for
that, my loyalty will likely extend beyond just a habit.
(Check out FairFolks
- friend of a friend’s new subscription-based coffee shop, which seems to be
doing it pretty right).
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