Subscription Business Maturity - Stage 1
We all know Subscriptions are hot right now. But with many companies turning to this model, the competition has also gotten fierce. And how do you know if the Subscription world is right for you? Looking at Meal Kit Subscriptions, how do you know you won't find yourself in the same situation Blue Apron got stuck in – with churn outpacing new sales and high customer acquisition and shipping costs.
In the next few weeks, our Subscription Insights blog will review Subscription Business Maturity . Using IDC's MaturityScape, we will break the process into 5 stages and discuss the characteristics of each stage. For those of you who find that you are in that stage, we will offer ways to progress and climb the ladder.
The first stage, called "Ad Hoc" or "Wild West" is when the company's focus is, above everything else, on attracting new subscribers. Because the business has no real data to work with just yet, their metrics are often backward looking, rooted in traditional systems. The management's approach is reactive, rather than proactive. These factors result in a customer experience that is inconsistent and perhaps even unpleasant for certain subscribers.
The Ad Hoc stage is the most difficult to rise from, especially if you are faced with a business that is already losing money and the only way forward is to invest more time and capital. So what do you do? You must focus on identifying your perfect customer and the value you bring to them. Figure out not only how to close the initial sale, but how you will add value over the course of your relationship with them, so they continue to renew. As you develop your strategy, make sure to look at your business through the eyes of you customer, rather than your own.
As you evaluate your processes further, look at your pricing model. Is it too complex? Is there a relationship between the price and the experience you offer the subscriber? Look at how you are storing your data. Are you using multiple systems? Can you eliminate duplication or automate something? Rather than looking backward at your financials, try using industry benchmarks.