The subscription economy knows no limits.
Remember how quickly the stream-from-anywhere Netflix model caught fire and consumed Blockbuster whole? Or how Amazon made relics of Sears and Toys ‘R Us?
There’s a reason that subscription business models have sent so many brick-and-mortar behemoths to the trash heap: the model makes a lot of sense. Why sell CDs and DVDs when people would rather pay a monthly fee to stream music and movies on demand? It’s more convenient, it’s a better experience.
Thinking broadly, anything can become a subscription. IT security hardware and office space. Exercise, grocery shopping, and meal preparation.
Hardware-as-a-service: why buy when you can subscribe?
The automotive industry has long been first to adopt many new technologies and business models. The internal combustion engine. The moving assembly line. Computer-aided design (CAD) and surface modeling technology.
Now they’re adding subscriptions to the mix.
Why? Because they can’t afford not to. Introducing a hardware-as-a-service model addresses the car industry’s oldest elephant in the room: owning a car is kind of a drag. Between the medieval haggling at the dealership and untimely maintenance costs, it’s a famously bad customer experience.
Connecting with Customers from Start to Finish
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Subscriptions provide a more customer-centric alternative. At least that’s the idea behind services like Hyundai Subscription: pay a monthly or annual fee to “own” a car without having to buy it or suffer through the pains of ownership. Care by Volvo offers a similar service and handles all of their subscription services, including enrollment, maintenance, and 24/7 concierge, from a mobile app.
How to help subscribers succeed across all venues
Car companies understand that they have to own the customer relationship. Otherwise, someone like Carvana will come along with nothing but a new business model and a clever slogan (“because buying a car shouldn’t suck”) and do what Netflix did to cable television and movie rentals.
Because introducing a subscription business model is one thing. Keeping subscribers and limiting churn is another thing altogether. How does a Volvo, for example, nurture and retain its Care by Volvo subscribers? And how does a Hyundai make sure its subscribers have consistently successful experiences?
The subscription model creates intensified demand for timely, low-effort, and personalized experiences across the customer journey. Car subscribers will initiate success journeys in a variety of new ways. For example:
- How-to: Sitting in the car, Googling how to connect their iPhone using Bluetooth, max tire pressure, or what type of motor oil to use
- Troubleshooting: Using their mobile phone to search the maker’s knowledge base for troubleshooting instructions on, say, resolving a low tire pressure warning and resetting the monitor
- Account management: Resetting their account password to access the app or online portal
- On-demand support: Sending a request for roadside maintenance or using the 24/7 concierge
Consider the following example: a customer is sitting in her shiny new Volvo XC60. She’s trying to connect her smartphone to the center display so she can blast the latest Beyoncé song. She has a lot of options. A contextual help pop-up on the in-car screen might give her the steps she needs to self-solve on the spot. Then there’s the Volvo mobile app, which she can access using a network-enabled smartphone.
She can always ask Google by voice or using a regular old Google search.
The point is, all subscribers care about is that they can easily get the information they’re looking for. Successful outcomes matter far more to the customer than the venue they’re using to find them. To keep their subscribers happy (and to keep them coming back), car companies must deliver value in all these digital channels, all at once.
To own the relationship, hand customers the keys
If we’ve learned anything in the world of subscription software, it’s that a company’s success depends on customer success. Distributed sales, maintenance, and support organizations must learn to become online subscription businesses dedicated to helping customers be successful after the sale.
During the post-sale journey, subscribers will use a variety of venues to interact, transact, and reach out. There’s the website experience. Chatbots, mobile apps, and community forums. All of these venues are more than just touchpoints: they are opportunities to nurture the relationship.
They are the moments in which a repeat customer is won or lost.
What companies are finding out is that they can’t support these kinds of success journeys without a way to deliver content where customers need it. Most public-facing and authenticated customer self-service and agent experiences aren’t prepared to meet the higher expectations of a subscription customer.
To elevate these experiences, companies are moving away from their decentralized knowledge bases toward centralized knowledge management platforms that enable the enterprise to harmonize content between internal teams and customer touchpoints.
Customers need quick answers, not full-length PDFs that are hard to find and even harder to use. They want to be able to do it themselves, easily, wherever and whenever they choose.
Meeting this demand is a big undertaking, no matter the vertical. In a time when customers hold the keys, companies have to find ways to consistently navigate them to successful outcomes. Those that cannot will find it difficult to keep customers coming back.
Time will tell.