The Surprising News About Retail One-Size-Fits-All vs. Personalized Subscription Plans
The one-size-fits-all vs. personalized subscription plan in the retail sphere has been a long-term debate for subscription companies. The more generic plans offer retail businesses an ease of management, and customers get a transparent, easy-to-understand offering.
On the other hand, personalised retail subscriptions lean into the popularity of the personalised experience. But new findings from the InternetRetailing report on customers and subscriptions brings up surprising results that can’t be ignored. Is there a way to make sense of these new findings?
Retail businesses offering subscriptions are faced with the tough choice whether to offer one-size-fits-all or personalised subscription plans.
It’s an understandable consideration because success can depend on choosing the plan that works best for customers.
But new findings in the InternetRetailing report SubscriptionX 2024 Report: Exploring Recurring Revenue, Growth and Customers, shed surprising light on which way current customers lean with their money. In fact, the findings go against conventional thought. But do these findings suggest that we have to change how we do things in the retail subscription world?
This article will cover the issues of retail subscriptions, talk through these surprising findings, and give some analysis on what you can do as a retail subscription business to satisfy as many customers as possible.
In this article:
- Why One-Size-Fits-All Plans Appeal
- Why Personalised Subscription Plans Appeal
- Report Findings – What’s So Unexpected?
- How to Make Subscription Complexity Easy
Why One-Size-Fits-All Plans Appeal
Sometimes people like things to be simple because life is complex enough.
A standardised retail subscription plan with standard pricing offers a straightforward approach for both the business and the customer.
What’s in it for businesses:
- Accessibility: One-size-fits-all plans make it automatically much easier for businesses to market their offerings. They can tackle a wide audience. They don’t need to spend time and resources targeting specific segments in different ways.
- Cost-Effectiveness: Because standardized plans take less time to plan and market they cut the cost of operations. And businesses have the option to spread the cost savings to their customers. The more competitive the pricing, the less likely customers are to leave.
- Simplicity: Running a subscription company can be complex enough without keeping track of individualised plans. Sales, Customer Service, and Revenue teams spend less time tracking terms.
- Scalability: For subscription businesses, scaling is life. So it has to be as easy as possible. One-size-fits-all makes scaling easy because there’s no need for extensive customization or restructuring.
- Consistency: Businesses can get a good reputation for giving their customers a clear, consistent subscription experience. Everyone knows what to expect.
It’s not just businesses that love the one-size-fits-all approach.
Customers can gravitate to them because they appeal on multiple levels.
What’s in it for customers:
- Hassle-free: Customers do not appreciate complexity. In fact, if even the website is complex, they’ll leave before they’ve even purchased a subscription. If they feel their time is wasted, or if they’re confused, they’ll leave.
- No decision fatigue: Choice blindness is a real thing. The more options a customer has, the harder it is to commit to a decision. A one-size-fits-all option lets them sign up quickly without navigating multiple options.
- More value: Customers get the value for (generally) less money. It’s affordable without sacrificing quality.
- No confusion: Most customers have multiple subscriptions. They need things to be as easy to understand as possible. With a one-size-fits-all, they always know where they stand, which simplifies things (and builds trust).
There’s no doubt that one-size-fits-all subscription plans have their place in the general subscription model, and that we as customers love them. Netflix is a perfect example. Everyone knows what they get for their monthly cost. Yes, Netflix does personalise the experience, for example with their recommendations for each user. But they don’t do it with price and terms.
Imagine how confusing it would be if Netflix gave each customer a completely customised plan with differing prices, and usage quotas. It would be an extremely difficult to keep track of everything. And when you consider that each account can have multiple users, that makes it all even more complex.
But customers also love the personalised experience. And for some time, customers have demanded customization in their subscriptions.
What’s so appealing about tailored subscription offerings?
Why Personalised Subscription Plans Appeal
There’s no doubt that these days, customers don’t just prefer personalisation, they expect it because it meets their needs, preferences, and behaviors.
And both businesses and customers have a lot to gain with a personalised approach.
What’s in it for the business:
- Revenue potential: The more personalised the experience and offering, the more potential to up and cross-sell products customers will find attractive through tailored recommendations. This in turn boosts CLV.
- Differentiation: Setting yourself apart in a crowded market can make a huge difference. Personalization meets the diverse needs of customers, and shows them a commitment to solving their specific problems.
- Better insights and data: Personalized subscriptions give businesses clear data on what works and what doesn’t, so that they can constantly improve their product development and offerings.
- Better brand loyalty: Personalisation boosts loyalty because customers feel valued. And when customers love a brand, they’re far more like to tell others about it.
These are attractive, long-term benefits for a retail business.
Customers also find personalised plans irresistible.
What’s in it for customers:
- Emotional connection: Everyone wants to be heard and understood. When a customer receives an experience tailored to their specific needs and circumstances, it’s appealing. Uniqueness drives up the value because it shows them that they mean something to a business- they’re not just a necessity.
- High-value and relevant offerings: Experimenting is for science class. Customers dislike having to pay to try out different things only to find each solution is not quite right or is completely wrong. Personalised subscriptions are built to align with their interests and needs.
- Better control and flexibility: Customers like to feel a level of control and flexibility over their subscriptions (in anything from time periods, delivery frequencies, product preferences, service level adjustments, etc). It boosts their satisfaction and cuts the chances that they’ll go elsewhere.
With benefits like these, it’s no wonder that customers prefer personalisation.
Which is why the numbers from the new InternetRetailing report seem quite surprising.
Report Findings – What’s so Unexpected?
The findings are that despite the immense demand for personalised subscription experiences and offerings, retail subscription customers are still choosing the one-size-fits-all plan more often.
This might get some retailers scratching their heads. Why would results go against conventional knowledge, backed up by stats?
It’s because of the specific nature of retail subscriptions, versus other industry subscriptions like SaaS.
As the report explains, one of the biggest factors in this discrepancy is hidden in the differences in terms and conditions between one-size-fits-all and personalised subscriptions. Specifically, the time periods.
Let’s look at specifics of the breakdown:
83% of personalised plans have a minimum length of 2-30 days. But only 64% of standard plans with fixed pricing have the same restrictions.
Standard plans more often (23% of the time) have a minimum length of about six months to a year, compared to just 9% of personalised subscriptions.
13% of standard subscriptions also give a minimum length of between 1-3 months, a timeframe that wasn’t given by personalised plans of retailers surveyed.
These stats mean that the retailers who want to capture all the benefits of both types of subscriptions need to:
Offer a lot more flexibility in their subscription term times.
Add options like pausing a subscription to cut churn and accommodate the unpredictability of life.
Offer different or better things as alternatives if customers don’t like what they’ve gotten.
Seems like a simple solution. But there’s a big challenge. To subscription retailers, the logistics of these small changes might be impossible.
It’s hard to keep up with subscription terms as it is. But to add new terms, and allow for flexibility that keeps terms, resources, and usage in constant flux is too big an ask.
But that’s only true when a retailer doesn’t have the right tools. But when they’re equipped, they can offer all the terms in the world, and get the best of both worlds.
How to Make Subscription Complexity Easy
The right subscription management makes everything so much easier.
That’s exactly what a retailer needs- a comprehensive solution that will streamline the end-to-end processes, so that inefficiencies and customer dissatisfaction are the thing of the past.
Enter Bluefort’s LISA
Bluefort’s LISA is an end-to-end subscription ERP solution specifically designed to simplify the entire management of personalized and one-size-fits all retail subscription plans.
Not only does it automate your processes, but it uses AI-driven data to shape experience and offerings that will thrill your customers and your teams, and build your revenue and customer base.
Here’s how it will revolutionise your retail subscription management:
- You’ll get agile and adjustable recommendations of the best pricing models AND products, no matter their complexity.
- You’ll get accurate data-driven insights into customer segments, allowing you to personalise as much as possible, automatically.
- Your customers will get the flexibility they need in their subscriptions, with no disruptions caused by your brand’s busy teams and manual errors.
- Silos will be crushed for good because your sales, customer service, and revenue teams will get information on contracts, terms, usage, and everything else in real-time. This cuts down on mistakes and speeds up the selling and invoicing process. No more revenue leakage!
- You’ll be able to eliminate loss-making orders because you’ll know how much your customers are likely to spend and use.
- Selling opportunities are spotted, and customers will be given the best upselling and cross-selling recommendations at the best times.
- You have the option of testing out different pricing strategies while you track customer behavior and automate operations.
- You’ll have improved revenue visibility, knowing that your numbers are accurate in real time.
- You’ll have automated and compliant revenue recognition.
- You’ll have streamlined invoicing, billing, and payment collection.
- Your customers will have a better customer experience that is as personalised as you want.
- Most importantly, you’ll be able to effortlessly manage both “one-size-fits-all” and customized retail subscriptions, linking procurement to manufacturing processes, accurately predicting supplier needs, and calculating manufacturing lead times, ensuring consistent, on-time deliveries right to your customers’ doorsteps.
Bluefort’s LISA subscription management solution will allow you to tailor your offerings and plans to make them as personalised, easy, and flexible as possible.
That means you capture the advantages of both types of retail subscription models, with less time and resources needed.
Why Compromise on Plans?
As a retailer, you shouldn’t have to make a choice that penalises you or your customers.
With LISA, you’ll be able to easily navigate your retail subscription management, ensuring no customer, no matter what type of terms they might need, is left behind.
When you give your customers the plans that they want, you’re not just selling a product or service; you’re delivering value and satisfaction.
That’s something that isn’t a surprise at all.
86% of consumers will leave a brand they trusted after two bad customer experiences.
– Emplifi
So if you’re looking to give your subscribers the best possible experience (and reduce churn!), make sure personalization is at the top of your priority list—it could be the difference between success and failure.
And if you give these SaaS customer personalization tips a try, you’ll be on track to providing them an unforgettable experience that keeps them coming back for more.
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