* Original article posted on National News on behalf of Quadrant2Design
Introduction
In the modern consumer landscape, the concept of ownership is evolving. According to a recent survey, 68% of adults no longer value possessions and do not believe that ownership defines them.
In the past, it was always standard practice to buy and own the products that we want but today more and more people are opting for subscription, leasing and rental services to gain access to everything from movies and games to food, grooming products, gym equipment, clothes and even cars.
Access over Ownership
Customers of subscription, leasing and rental services prioritise their access to a product or service over owning it themselves.
There are many reasons for this shift including the cost efficiency that subscription services can offer, as well as the significant reductions in logistical hassles.
Cost efficiency
The increasing prioritisation of access is particularly evident in sectors like transportation (car leasing), entertainment (streaming services) and fitness (gym memberships), where purchasing and owning products outright would work out substantially more expensive than paying for continued access.
These services often provide a cost-effective alternative, through which customers can enjoy the benefits of the products or services without the considerable initial outlay, which is particularly appealing for luxury items or high-tech gadgets.
Logistics
In many cases, opting for access over ownership also means less logistical hassle for the customer.
Renting your home, instead of owning, means that any substantial repairs will typically be the responsibility of the homeowner. Another common example, membership to a gym allows customers access to vast amounts of fitness equipment without needing the space to house and store all of that equipment themselves.
Many other businesses have adapted their offering to provide similar benefits. Quadrant2Design are an exhibition stand design and build contractor who offer a unique Free Hire exhibition stand service. Through this service, their customers borrow their exhibition stand hardware, removing the added cost and hassle of owning their stand outright.
Evolving Loyalty Trends
Customer loyalty is the holy grail of business. It is a customer’s likelihood to do repeat business with a company or brand and actively recommend that brand to other people. This loyalty is the result of positive experiences with the company, as well as ongoing satisfaction with their product or service.
The massive growth in subscription, leasing and rental services, combined with evolving perceptions of ownership, have led to some significant changes in how customers develop and show loyalty towards brands.
1. Decreased brand loyalty
As customers have continued to shift their ideals from owning to accessing products and services, traditional brand loyalty has decreased.
Customers are now increasingly drawn to whichever businesses offer convenience, quality and flexibility, as opposed to being loyal to a specific business or brand.
2. Increased flexibility
Subscription services allow customers to regularly switch between products, services or providers to better suit their changing needs.
While many businesses have responded by enforcing longer-term contracts, customers still do not have to worry about the long term logistical issues of disposing of, or reselling, products when they want to switch to a different offering.
3. Focus on continued satisfaction
When ongoing access to a product or service is the customer’s main priority, their continuing satisfaction becomes closely linked to their loyalty. Companies offering subscription, leasing and rental services must continually provide outstanding service to retain customers over the long term.
If satisfaction with the brand’s offering diminishes, customers are unlikely to stick around purely based on loyalty to the brand.
4. Personalised experiences
Subscription, leasing and rental services collect extensive amounts of data on their customer’s preferences and behaviours, allowing for highly personalised recommendations and experiences.
While this does raise questions about the ethical use of information, it also has the potential to enhance customer loyalty over the long term by tailoring product and service offerings to individual interests and preferences.
Implications for Businesses
Consistent engagement
Companies must maintain consistent customer engagement to ensure that their audience remains aware of their value proposition. This engagement can include regular emails or social media updates, the introduction of new features and providing helpful ongoing customer support.
Companies that fail to maintain consistent quality engagement with customers risk these customers building new relationships with more attentive competitors.
Quality and reliability
Customers today are much less forgiving and have the flexibility to easily change to a different provider if not satisfied. While customers can be brutal in dealing with lacklustre businesses, they’re likely to remain loyal to those who provide consistent long-term quality.
It is for this reason that consistency is essential for retaining customers over the long term.
Flexibility
Flexible subscription plans and pricing models have become integral to retaining and expanding a loyal customer base.
As people’s lives change so do their needs as customers. Companies who respect this and offer flexibility in their products and services are more likely to retain their customers over the long term.
Conclusion
The rise of subscription and leasing services is rewriting the rulebook for customer loyalty. While traditional brand loyalty does remain a lingering force, customers’ focus seems to have shifted towards seeking out exceptional personalised experiences and flexibility that comes with access over ownership.
In this new landscape, customer loyalty is increasingly defined by the value and experiences that subscription and leasing services can deliver. Businesses must adapt to this changing landscape by continuously improving their offerings, enhancing personalisation, offering flexibility and maintaining outstanding customer service.