Ep # 79 - Subscribed and Satisfied: Optimizing Your Spending Without Sacrifice
Joe and Robbie Kellman Baxter break down the widespread shift towards subscription models, exploring how businesses and consumers benefit from this trend. However, the subscription landscape is saturated, and the challenge of tracking and managing numerous subscriptions is real. We highlight that the average North American's significant increase in monthly spending on consumer subscriptions.
We also touch on the subtle tactics some companies use to make canceling subscriptions hard, shedding light on the importance of values alignment, simplicity in offerings, and transparent communication in fostering successful and long-lasting subscription relationships.
What You’ll Learn in Today’s Episode
Saturation of Subscriptions: There is a prevalence of subscription models in various industries, from streaming services to meal kits, marking a significant shift in business strategies over the past 15 years.
Consumer Spending on Subscriptions: Robbie and Joe bring attention to the financial impact on consumers, revealing that the average North American spends between $217 and $273 a month on personal consumer subscriptions. This can mean a substantial economic commitment to maintain these ongoing services.
Challenges in Cancellation: Consumers can face challenges in canceling subscriptions, with companies employing tactics such as making the cancellation process difficult or not sending reminders.
Values Alignment in Subscriptions: It’s important to align values with your subscription relationships. Using an example of an organic produce subscription service, we examine how subscriptions can provide great value when there is alignment with the customer's values, such as supporting local businesses and maintaining a healthy lifestyle.
Business Tactics for Retention: We examine business tactics used to retain subscribers, such as making it challenging to cancel. This can be a tactic like adding extra steps for customers to call before canceling, claiming it improved retention.
Ideas Worth Sharing
· "The average American is spending somewhere between $217 and $273 a month on consumer subscriptions."
· "Once you set it, you probably are going to forget if you, especially in situations where you sign up for a specific moment in time."
· ”One of them said, 'You know, what's really great is I put an extra task they have to call us before they can cancel. And it's actually improved our retention by three months.'”
· "And unless you're carefully looking at your credit card statement, your Apple apps account, your Amazon subscriptions account, which are quite hidden, it's easy to forget what you have."
· "The best subscription offerings, actually, I don't know if you've had the experience of calling your newspaper or your phone provider and threatening to cancel, and suddenly they're like, 'Oh, what about if we gave you 10% off? What about 20% off?'"
Resources in Today’s Episode
Retirement Planning Simplified
Are Your Subscriptions Still Serving You? An Honest Check-In
If you're feeling overwhelmed by the endless stream of subscription expenses and struggling to keep track of where your money is going, then you are not alone!
Robbie Kellman Baxter, a renowned expert in the subscription economy, brings a wealth of knowledge and insights to the podcast. With a deep understanding of consumer behavior and subscription models, Robbie offers invaluable perspectives on managing subscription spending and making informed financial decisions. As the author of "The Membership Economy" and a trusted advisor to numerous subscription-based businesses, Robbie's expertise is sure to provide our audience with practical strategies for optimizing their subscription spending and achieving better financial management.
In this episode, you will be able to:
· Mastering the subscription economy trends and challenges will transform your financial habits and save you money.
· Learn the art of managing personal subscription expenses effectively and gain control over your spending.
· Discover strategies for optimizing subscription spending to make the most of your hard-earned cash.
· Unlock the importance of mindful subscription management for a stress-free and organized financial life.
· Explore how enhancing customer relationships through subscriptions can benefit both you and the businesses you support.
The Value of Flexibility and Annual Subscriptions
One attractive feature of subscription services is flexibility. The ability to opt-in or out whenever you want is appealing to many. But Robbie disclosed a little secret; companies often offer annual subscriptions at a discounted rate. Not only does this provide a financial saving but the once-a-year payment often brings a level of budget awareness. Remember how Robbie suggested to go for an annual subscription if you're a Spotify addict? Having a larger, once per year payment often draws attention and keeps you in check to not overspend.
Aligning Values with Subscriptions
The convenience and accessibility of subscription services can be enticing, but it's crucial not to lose sight of how they align with your personal values and priorities. Subscriptions should serve a purpose and bring value to your life, rather than becoming an unnecessary burden on your spending. Our guest Robbie brought some valuable perspectives on this. For example, she emphasized the concept of aligning your subscriptions with personal values, which is quite interesting. Imagine Netflix offering thousands of shows, but if none of them pique your interest, it’s probably not a good fit for you.
Simplifying Subscription Offerings
A simple, hassle-free subscription offering is what draws most consumers today. Transparency, flexibility and customer-friendly practices make subscriptions all the more appealing. And trust us, a straightforward pricing structure without hidden charges goes a long way in maintaining customer trust. Netflix was a prime example Robbie quoted during our podcast. Their simplicity and straightforward approach to pricing were something Robbie greatly admires. She further stresses that businesses adopting such a clear and simple subscription model will boost their customer retention rate.
The resources mentioned in this episode are:
· Visit Robbie Kelman Baxter's website at Robbiekelmanbaxter.com to learn more about maximizing lifetime customer value and saving money.
· Follow Robbie Kelman Baxter on LinkedIn, Facebook, Twitter, and Instagram for daily tips on saving money and ethical business practices.
Timestamped summary of this episode:
00:00:00 - The Rise of Subscription Economy
Robbie Baxter discusses the rise of subscription and membership economy, where businesses have shifted to a subscription model for various products and services.
00:04:52 - Tracking and Managing Subscriptions
Robbie highlights the challenge of keeping track of subscriptions and the average amount spent by consumers on subscriptions, prompting the need for a review of existing subscriptions.
00:09:24 - Aligning Values with Subscriptions
Robbie emphasizes the importance of aligning personal values with subscriptions and suggests reviewing existing subscriptions to ensure they align with values.
00:11:29 - Simplifying Subscription Offerings
Robbie discusses the importance of clear and simple subscription offerings, easy sign-up and cancellation, and the drawbacks of complex pricing structures and negotiation tactics.
00:17:05 - Annual vs. Monthly Subscriptions
Robbie advises considering annual subscriptions for long-term commitments, citing potential cost savings and additional benefits compared to monthly subscriptions.
00:17:50 - The Value of Flexibility and Annual Subscriptions
Robbie emphasizes the value of paying for flexibility in subscription services and suggests looking into annual subscriptions for savings and simplified billing.
00:18:01 - Noticing the Annual Cost
Robbie highlights the importance of being aware of the larger once-a-year subscription cost compared to the smaller monthly fees that often go unnoticed on credit card statements.
00:18:33 - Connect with Robbie
Robbie invites listeners to connect with her on various social media platforms for money-saving tips and ethical customer value strategies for businesses.
00:19:17 - Wrapping Up
Robbie expresses gratitude for being on the podcast and thanks the hosts for the opportunity to share her insights on subscription services and customer value.