Fighting subscription fatigue: Keep customers engaged with bundles
- mariekesindelka1
- Apr 10
- 4 min read
Consumers want simplicity and convenience: How subscription models can meet their needs
Consumers increasingly seek simplicity and convenience. The concept of ownership is shifting towards a preference for use: access over possession. Subscription models can smartly tap into this shift. They allow consumers to access products and services without the burdens of ownership, improving their lifestyle by offering convenience, maintenance, and flexibility. Think of subscriptions for washing machines, meal kits, and even energy audits—the possibilities seem endless. But what truly makes a subscription model valuable for consumers? And how can brands leverage both the benefits and challenges of this growing trend?
Subscription fatigue: A growing challenge
A subscription, in itself, is not the end goal, but a means to build a lasting relationship with consumers. Recent research from Adyen shows that nearly 9 out of 10 (89%) Dutch consumers subscribe to services like television, fitness, or music. On average, each Dutch consumer holds three subscriptions, which is one and a half times more than in the US. However, in the Netherlands, 39% of consumers plan to reduce the number of online subscriptions they have.
This large number of subscriptions leads to subscription fatigue, caused not only by high costs but also by the mental burden of managing multiple accounts, remembering passwords, and keeping track of renewal dates.
To combat subscription fatigue, businesses need to offer a streamlined and personalized experience. They must understand what their customers truly value—and why. Offering flexible options, such as pausing or adjusting a subscription, could be a key factor in reducing cancellations.
Understand your customer and make it personal
What makes a subscription valuable depends on the needs and values of each consumer. A "seamless experience," where the subscription integrates fully into a consumer's life without barriers (like constantly entering passwords), can only be achieved when companies understand their customers inside and out. Personalization is the key.
But how do you make an offer feel personal? Start by focusing on your customer. Don’t just ask what they need—use data to analyze behavior and preferences. For example:
Listen actively: Use surveys, focus groups, and usage data to understand customer needs so you know which features are most appreciated by which audience. Spotify knows the music preferences of its users by analyzing their listening behavior. This allows Sonos to recommend music that fits the customer’s taste.
Offer choices: Let customers choose which services they want to combine in a bundle. A great example is Bloomon’s subscription, where customers can always adjust the size of their bouquet and the frequency of deliveries.
Experiment with pricing: Make sure you have deep insights into the price elasticity of each element in a bundle. This can be easily researched using A/B testing. Most mobile and internet providers have well-varied offerings that cater to different customer groups.
Example: An energy contract & Smart thermostat
A successful example of understanding consumers combined with offering a bundle is the partnership between Eneco and Toon. By offering an energy contract along with Toon’s smart thermostat, customers are not only relieved of hassle but also gain added value that improves their lifestyle.
This bundled subscription makes heating your home and managing your energy usage and costs one cohesive experience, which has become a part of life for some consumers. It also simplifies things for the consumer, as the payment for Toon is included in the monthly energy bill.
Going a step further: 'Life-Centric' thinking
Many companies focus on customer-centricity, but the real challenge lies in what we call "life-centric" thinking. In other words, businesses that align their services with the broader context of their customers' lives, including changes in their needs and preferences. These businesses go beyond just delivering one product or service.
Netflix excels in life-centric thinking. By offering multiple family profiles within a single subscription, they ensure that each household member has a personalized experience. This enhances engagement, as each user feels the service is tailored to them.
Another example is Amazon Prime. This subscription model combines many services, from free shipping to streaming and exclusive deals. As a result, consumers feel more value and are less likely to cancel. The core of this approach is a deep understanding of what customers need at different stages in their lives, which can range from convenience and inspiration to control and relaxation.
The pitfalls of subscription models
While subscription models offer many benefits, there are also pitfalls to be mindful of, such as:
Too many choices: Don’t overwhelm customers with endless options. Keep bundles simple and transparent. For most people, choosing a health insurance plan each year is not simple, due to the overwhelming number of options and lack of transparency.
Lack of flexibility: Consumers want to stay in control. Offer options to easily pause, adjust, or upgrade subscriptions. Being locked into a multi-year contract can lower renewal rates, leading to shorter customer lifespans.
Lack of visible Value: If customers don’t see the value they’re getting, they’re more likely to cancel. Keep regular communication about the benefits of the subscription, such as through monthly updates or exclusive offers.
Too expensive: If consumers feel they’re paying too much for the convenience of their subscription, they’re more likely to switch to a cheaper alternative. This explains why paid bread delivery subscriptions often experience high customer churn.
From ownership to experience
The success of a subscription model depends on how well it addresses the evolving needs of consumers. Ownership is being replaced by flexibility and convenience. By using data and insights smartly, you can create an offering that’s not only relevant but also truly adds value to your customers’ lives.
Here’s an example: Imagine a mobility company offering a subscription where consumers get access to electric bikes, scooters, and shared cars—all through one platform. By analyzing customer behavior, they can offer personalized suggestions, such as providing an electric bike on weekends with good weather or a shared car for a weekend getaway.
By balancing personalization, convenience, and flexibility, you can combat subscription fatigue and build a long-lasting, valuable relationship with your customers. Bundling subscriptions isn’t the end goal; it’s a way to genuinely enhance the quality of life for your customers.
Cazijn Langeler
Director Retail
+31610545518