Ownership to access: how to succeed in the subscription economy

We have moved from an economy of ownership to an economy of access. In media, DVDs are no longer crammed into TV cabinets, CDs no longer overspilling holders, newspapers no longer cluttering recycling bins. Even books are dwindling, replaced by audio books or digital editions. Taking the place of these previous living room stalwarts are platforms where - for a monthly subscription fee - we can access vast online libraries surpassing anything we might own. The key driver of Amazon Prime - that counts over 10m subscribers in the UK - is free next-day delivery.

This model of access over ownership enables businesses to develop an emotional connection to their customers, rather than a purely transactional relationship. We are happy to pay recurrently for a service, even if it’s not utilised fully. The relationship is similar to a members’ club where a member might go many months without visiting, before walking in sporadically on a sunny afternoon and accessing at their convenience. This is because these organisations offer membership-like access; we agree to be part of these organisations, belonging and engaging with their mission and what they provide. At the FT for example, subscribing to our newspaper extends beyond the transactional relationship of paying for content. Subscribers have a personalised experience, early access to events through FT live, and vertical-specific content depth. All features and benefits create a sense of community, aligning with readers’ identity.

The subscription economy providing access over ownership has now extended to other sectors with a range of direct-to-consumer businesses adopting subscription businesses with a membership flavour, often for the price of lunch. Men’s shaving companies adopted this subscription access model early; discouraging ownership of expensive razors and providing access to a cheap, continuous supply. Key success stories include Dollar Shave Club bought for $1bn by Unilever and Harry’s razors bought for $1.4bn by Wilkinson Sword. Other sectors include women’s health (e.g. Glossier), fitness (e.g Classpass), and meal plans (e.g HelloFresh). Most of these deliver products, but provide access to a bespoke service, delivered to your home. Most importantly, the principles of an emotional connection to readers remain the same.

So with multiple different sectors adopting subscriptions with an emotional or membership influence - what are the key strategic decisions to make to succeed? As the digital growth and subscriptions consultancy from the Financial Times, FT Strategies can help you with the following eight suggestions:

1. Ensure you have a product or service with loyal users who are required to engage frequently e.g razors, beauty products, or journalism
2. Develop an ongoing relationship with your customers through various touchpoints e.g. newsletters, insights and blog posts, loyalty programmes, and online communities facilitating discussions and interaction
3. Consider using acquisition methods like trials that allow you to showcase your core value offering to high value customer
4. Ensure the onboarding process is as seamless as possible through removing friction, delivering immediate value, and rewarding desired behaviours
5. Offer opportunities for users to customise their experience immediately so they develop a sense of control over the interaction
6. Track your users with data, understanding what they like or dislike and personalising your service or offering to reflect preferences
7. Ensure there is internal strategic alignment and buy-in around developing a customer-first culture with all decisions reflecting this
8. Be transparent in your actions, asking subscribers for feedback and communicating key decisions

If you would like to discuss any of these in more detail, please do not hesitate to reach out - alex.milne.turner@ft.com