Customers Don’t Trust Subscriptions

by Jennifer Chesak
August 28, 2013

 

Consumers have spoken. An alarming 80% say they regret signing up for subscription services to receive products on a monthly basis. This customer retention model is quite simply going the way of the dinosaurs. Online and mobile shopping options negate the need for consumers to sign up for monthly re-orders, and customers shy away from brands that only offer this method of purchasing.

Recently, Chicago-based startup GimmeAnother, a mobile application services company launched a survey that polled a randomized group of 1,000 online shoppers and asked the question: “Have you ever subscribed to a monthly re-order program and regretted it later?” More than 65% of consumers said, “I have never subscribed to one of these.” And of those who have subscribed to a subscription service in the past, more than 80% said they regretted it.

“Consumers drop out of subscription services not because they dislike your product but because the quantity and timing elements don’t match their needs,” said Jon Roketenetz, GimmeAnother’s CEO and president. “Retailers want to offer convenience, but there’s nothing convenient about not having coffee beans because your monthly supply hasn’t arrived yet. And conversely, I don’t need 10 pounds of coffee taking up valuable pantry space.”

For the retailer, the subscription model has always held the promise of repeat revenue, but if customers drop out some time after they sign up—as survey results suggest—that revenue goes down the toilet. And there’s also the possibility that the retailer-customer relationship gets tarnished. “A subscription can actually create anti-loyalty,” said Roketenetz. “As a consumer, it can give me the sense that a company is not doing right by me. Essentially, they don’t trust me to purchase their product again. And ultimately, that makes me less likely to trust their product.”

The GimmeAnother team recently launched the GimmeAnother App, a re-order solution that uses “save-to-mobile” technology, so that customers can re-purchase their favorite items quickly and easily at a later date. Retailers who sell products that customers re-order again and again can include a save-to mobile button next to hot-ticket items. GimmeAnother works right along with a retailer’s existing shopping cart system, so there’s no hassle. Find more information at www.recurrable.com.

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