Customer Service in a Subscription World

You know the deal.  Subscriptions are sweeping the marketplace these days, and while the subscription business model might not be that novel any more, the companies using it just keep getting funkier—in the best sense of the word.  

Anything can be delivered “as a service” now, which can cause some heads to shake. Whoever thought you could make a business out of renting cars by the hour or delivering shaving supplies, hosiery, all sorts of clothing, and food and wine through a delivery service on a periodic basis that suits the customer?  We’re a long way from the old magazine subscription of just a few years ago, for sure.

As disparate as all of these services are, they have several things in common. They operate on razor-thin margins, they have far more transactions to get right than comparable companies in more traditional markets, and their customers can walk away in most cases at will. If that’s not a customer service challenge, I don’t know what is.

But it goes even deeper than that because today’s customers are being insidiously trained to think like subscribers, even when they may not be operating in a subscription environment. This means, just as with real subscription companies, more traditional vendors, if they’re smart, need to keep their antennae tuned to the sound of the subtlest sigh of customer disappointment.  

Subscription companies know that customer attrition is the number one thing they must guard against, and they build their service modes accordingly. A customer who doesn’t stay long enough might end up costing a vendor money due to onboarding and other costs that never get recouped. So subscription companies go to great lengths to collect big data and analyze it for signs of customer dissatisfaction and attrition. Oh, I forgot to mention that very often subscription companies can’t afford the luxury of picking up a phone and randomly calling a customer to see how things are. They need a good reason to call, and the data analysis gives it to them.

So subscription companies go to great lengths to capture and analyze data and—this is important—to develop customer-focused metrics that guide their businesses. Three of the biggies are churn or attrition, the cost of capturing new revenue, and recurring revenue.  If you work for a subscription company, you already know this.

You also know that being proactive is critical to your success, which is why you don’t wait for customers to swoon and pay so much attention to the information bread crumbs found in their data.

Guess what? That’s a good approach for any vendor these days. As subscriptions become more prevalent and customers become more attuned to the business model, look for increased pressure on traditional businesses to play up to the subscription standard.

What is the subscription standard? Glad you asked.

It’s about proactivity, about creating and using metrics by sifting through the data stream to find the exceptions, the customers that most need your attention. If you are a traditional business, that data stream won’t be as robust as with a subscription company but this is the next best thing is. It’s what you can have if you leverage social media and analytics correctly in customer service.

I’ve seen companies develop multistep service processes that filter the Internet looking for keywords that include company, product, and brand names and signs of trouble or even bliss. What comes in from the Web is sorted, given a weight or level of importance, and sent off to specialists for disposition. Some of the buckets these companies use for sorting include enhancement requests, complaints, compliments, service needs (different from a technical question, more often business-related questions), and how-do-I-do-this questions.  One software company I know even looks for fraud or theft, and it’s amazing what they’ve found since they started looking.

What’s great about this approach is that the raw material costs nothing and the software you need to run everything can be delivered as—what else?—a subscription. However the results you can derive in good will and customer retention can be sizeable.  

Taking a more proactive and socialized (including analytics) approach to customers is a smart thing for any business because regardless of your business model, customers are coming to expect that you will behave like the subscription vendors who seem to give such awesome service.