What do CVS, Amazon, Exxon Mobil, Apple, and Walmart all have in common? Each of these companies occupies a top-five spot on the Fortune 500 list, and they all offer subscription services. Coincidence? Not a chance.
The nature of doing business has evolved. There was a time when businesses held all the power, but now that power sits with the customer. The most successful companies understand that the future of business is value-based and relationship-driven.
At the intersection of building relationships and providing value is subscription, and some of the biggest companies in the world are putting their money behind it.
Read on to learn about how corporate Fortune 500 strategists are making subscription services the future of business.
Rethinking Subscription Services
In the not-too-distant past, magazines, mailed movie rentals, and product-filled boxes made up the nascent subscription industry. Today, the industry is wildly diversified.
From health and wellness services to car subscriptions, video games, and airline miles, businesses across nearly every industry have expanded to offer some form of subscription service.
With so many different industries and offerings, pinpointing the keys to success is tough. However, all of the top companies have a few things in common; the first of which is listening to the customer.
By taking note of customer feedback, businesses can more easily identify real pain points among their target audience. Using that data, businesses learn what their customers are looking for and tailor their offerings to fit the needs of customers, thereby creating must-have subscriptions.
Companies running successful subscription services don’t limit themselves. They use out-of-the-box — but not necessarily out-of-the-subscription-box — thinking to come up with innovative ways to meet their customers’ needs. In many cases, the result isn’t one but multiple subscription offerings.
For example, CVS —– number 5 on the Fortune 500 list —– offers CarePass and ExtraCare. While CarePass caters to individuals who use CVS to fill prescriptions and offers same-day refills to members, ExtraCare appeals to those looking for the convenience and cost -savings of a corner store by offering loyalty points and coupons to goods beyond the pharmacy.
Innovation Is Trending
Subscription success stories offer creative solutions to common problems. Take the crown jewel of the Fortune 500, Walmart, for example. Walmart’s membership plan, Walmart+, boasts free grocery delivery, discounts on gas, free shipping, and mobile in-store checkout.
Walmart’s comprehensive subscription service saves customers two things everyone values: time and money.
Instead of offering a single comprehensive plan, some companies — like Apple — prefer to group multiple services as bundles. With three different plans, Apple One offers six individual services for one monthly fee. The idea behind Apple’s bundle is that each service is good on its own, but that they’re “even better together.”
Other companies do it all. Amazon, for instance, offers several comprehensive subscription services as well as bundles. From Amazon Web Services to Prime memberships and from Audible to Kindle Direct Publishing, Amazon subscriptions are seemingly limitless.
Furthermore, Amazon services constantly become more valuable. When Amazon Prime first launched in early 2005, its only offer was free and discounted shipping. Now, with streaming services, two-hour grocery delivery, and Prime Day, it’s one of the most valuable subscription services available.
Lessons in What Not to Do
These Fortune 500 giants also, by omission, reveal what subscription offerings should avoid. As a rule of thumb, businesses should steer clear of practices that deceive or discourage customers.
If a customer wants to cancel his or her subscription, it should be an easy and painless process. Canceling shouldn’t be a hassle that requires planning and even deceit, like when trying to end a gym membership – looking at you, Planet Fitness.
Some of the most popular and successful subscription services have easy cancellation processes. When customers don’t feel held hostage in their membership, they’re far more likely to come back when the time is right for them.
Moreover, significantly changing promotional pricing or sneakily increasing fees is a great way to deceive and anger your customers — ahem, Comcast. Instead, being up front and transparent about pricing changes builds a relationship of trust between a business and its customers.
A good customer relationship is key for building a successful subscription service, but some business practices put that relationship in jeopardy. Predatory pricing and impossible cancellation processes will cause customers to run for the hills.
Running Successful Subscription Services
Today, building a profitable business relies on the relationship between the company and the customer. This relationship is built over time upon trust and transparency. Shady business practices can quickly ruin everything — and you’ll be hard pressed to win back customer trust in the future.
The top Fortune 500 companies serve as a masterclass in running subscription services. With value-based, relationship-driven offerings, any business can succeed.