The Psychology Behind Subscriptions
Subscriptions have become the cornerstone of the modern digital economy, from online streaming services, software tools and dinners to our door, the subscription model has fundamentally transformed how we consume and pay for these services.
When discussing subscriptions in our personal lives with the Subzapp team, the word that often came up was ‘convenience’, we just love the ease that the subscription rolls over each month and we get a continuous service without having to think about it.
We thought we’d take a deep dive into the Psychology behind the subscription model and the key principles that keep consumers engaged and businesses profitable.
One of the most powerful reasons people subscribe is for the reason mentioned earlier: convenience. The set-it-and-forget-it nature of subscriptions appeals to our inner design for effortless routines. Once you subscribe, you no longer have to think about making repeated purchases and this automatic renewal process is less mentally taxing.
In addition to convenience, consumers love the feeling of getting a great deal. With subscriptions, businesses can package what may have been a high up-front cost into smaller, manageable monthly payments. For example, website hosting may cost £600 for a year, splitting this into 10 bite-sized payments, or offering 2 months free seems far more manageable, and better value!
Commitment Bias also plays a huge role, once a consumer has subscribed they are more likely to stick with that service over a long time. This is known as the “sunk cost fallacy”. Consumers tend to stay committed because they’ve already invested time and money. This psychological bias keeps a business’s subscription offering steady over the long term, often giving a level of financial security.
But what does all this mean for your agency?
With the rise of available subscription services in our personal lives, subscription offerings are also growing within businesses. This psychology still applies to business owners and key decision-makers. Many marketing agencies now offer SEO & PPC services, website hosting and, many other general marketing activities on a rolling monthly basis.
However, keeping on top of the management of these growing customer subscriptions can be a tumultuous task and can often be lengthy and time-consuming. That’s where Subzapp comes in! Subzapp is the ultimate tool for business owners offering multiple subscriptions to their clients, you can track not just your revenue but also key metrics such as growth rates and subscription types all in one easy-to-use platform.
If you’re interested in a free demo to find out more about Subzapp, contact our friendly team today!