Subscribing to modern sales models

By Rhys Handley, Monday 29 October 2018

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If juggernauts like Netflix and Spotify are anything to go by, the flexible subscription model is in vogue right now.

subscripts

Rolling monthly contracts for goods and services are increasingly popular in consumer sectors according to a new DMA report, which found 45% of subscription users would like to pay for more products and services this way.

The most flexible options are the most popular by far – 73% try to avoid services that tie them into long-term deals. However, the DMA suggested that these rolling contracts are key for attracting new customers and encouraging brand loyalty over time.

DMA managing director Rachel Aldighieri says: “Flexible subscriptions are well-suited to a consumer’s desire for more choice and control, offering a way to try something new without having to commit themselves to a long-term relationship.”

Dipping their toe in, customers evaluate the reliability of services while knowing they have the option to drop out. But change is scary and unpredictable – familiarity, comfort and reliability are attributes that can convince users to stay the course.

Benefits of the subscription model in the B2C sector are transferrable to the B2B world of commercial print – in a marketplace where clients change their minds as the wind changes direction, a model granting customers flexibility and service providers security of income could be welcome.

“Subscriptions are very appealing to printers because they give predictability of revenue,” says Simon Biltcliffe, chief executive of future-minded Bicester-headquartered firm Webmart. “Turnover can be highly volatile, and it’s hard to know what is going to come in each month.

“Costs are relatively predictable compared to the low visibility on income. With people paying something like a monthly retainer for print services, you can reduce risks, allowing a predictable income alongside your costs and granting a fuller view of your business.

“But people do not like to sign up to contracts, so if you’re going to go ahead with this model you need a compelling offer to convince service users to migrate.”

Subscription services are rare, if not non-existent, in print, but the web-to-print arena lends itself well to the model, given its fundamental similarities to the many consumer-based subscription platforms already enjoying success.

The elusive notion of a compelling offer to draw clients in is stumping boardrooms when the idea crops up in discussion. York printer Wood Richardson considered and set aside the concept when formulating its own new web-to-print platform, launched this month.

Managing director James Richardson says: “It was certainly discussed while we were in development, but it was a matter of timing and the fact it is such a new concept for print that meant we chose instead to go with a print-on-demand model.

“You have to consider ways to convince both customers and cynical old-school printers. The days of offering a quicker service to attract clients are gone. Perhaps you could offer a reduction in cost – possibly something labour- rather than materials-focused, like artwork.

“I am sure we will look at it again, but we would have to identify which of our products sell the most consistently and then probably set up a new service for them specifically.”

Apprehension from a deeply-entrenched school of thinkers is one roadblock to getting the industry onside, though mitigating for tight margins and the wide variety of different services many modern printers offer is another.

Sheffield digital printer ProCo – recently crowned Company of the Year in the PrintWeek Awards – deals in everything from “bog-standard 100gsm paper” to “450gsm high-end speciality materials”, according to head of strategic accounts and projects Andy Lydiatt.

“We have not directly considered subscriptions before, but it will definitely come up in a future meeting,” he says. “The difference with a service like Netflix is that it commissions and creates its content itself, so it has full control of its spending.

“As we produce things job-to-job, it would be hard to balance the variance between the costs of different materials and offer subscribers a fair price.

“Subscriptions may have to offer clients something cheaper and have certain controls in place compromising on freedom of choice, but I think there is a halfway mark between standard web-to-print and this concept which could make it fit for purpose.” 

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