People forget how many subscriptions they have, and companies are quick to capitalise on that. Welcome to the wonderful world of recurring revenue.
In university cities, bicycle stands are colouring blue with Swap bikes. The older generation may have limited themselves to subscriptions to newspaper, magazine, roadside assistance and lottery, but young people today are living it up in the subscription candy store. The generation that eschews ownership in favour of carefree use is going all-in for SAAS, CAAS and HAAS. I.e., Software, Content and Hardware As A Service. For BAAS, Bicycle As A Service. And since last week, also for TAAS, Nike’s Trainers As A Service. It’s great to see how those purposeful, consumer-centric companies keep on making our lives more convenient with their films, music, razor blades, vegetable boxes, condoms and sports shoes.
A fresh patch of poop grass on your doorstep every month: https://doggielawn.com
But aren’t we going a little crazy with this EAAS, Everything As A Service? And is it really customer centricity? Or are we being duped into spending more and more on services we don’t need? And are marketers, now that Byron Sharp has taught us that loyalty is a fable, switching to Plan B: using promises and free trials to lure customers into a funnel they will never be free of again?
The answer revealed itself in an unexpected place: the Kidney Foundation charity. A friendly fundraiser at the front door. In a sweeping gesture, I wanted to put €100 in the collection box – but I couldn’t. Please fill this in, sir, then you’ll automatically donate a sum every month. Not having gained a penny, the volunteer continued on her route; even in fundraising, only one thing matters: recurring revenue. In today’s uncertain, disloyal world, we can only look ahead a few months, and that makes staying in business hard. But if you have a subscriber pool of people who stay with your service for 7 years on average, then you’re good to go. Which is why recurring revenue is a selling point at the stock exchange, and it creates a nice multiplier if you want to sell your company.
The flip side of this approach is a tsunami of subscriptions that – as is the case with credit cards – leads to overconsumption. The average American spends $237 on subscriptions every month. This will be less in the Netherlands, but millennials already have 16 subscription plans on average – i.e., €2000 worth of fixed expenses that research shows they are barely aware of. After all, it’s ten euros here, a few euros there – which is easy to forget, just like your log-in credentials.
There’s an app for everything, and subscription dementia is no exception. Truebill has developed an app that uses your banking data to generate an automatic overview of your running subscriptions, and it warns you if you’re paying for one you don’t actively use. But Truebill also volunteers to dig a little deeper into your financial information, and conveniently presents you with special offers for a cheap loan or insurance plan.
High time for the commercial industry to show some self-restraint. If they don’t, the government will intervene: Think before you subscribe. With an emergency warning to the public: Great invasion of subscriptions. Keep windows and wallets closed!