New research reveals that 73% of consumers avoid services that tie them into long contracts.
Today’s consumers are demanding greater flexibility and control over what they’re spending, flexible subscriptions (for example, monthly rolling contracts) offer an alternative to previous long-term contracts that do not require undesirable commitments.
Among subscription users, 54% agree they opt for the most flexible options when taking out subscriptions – even if it costs them more.
Flexible subscriptions tend to appeal to those on higher incomes, parents and Millennials – 77% of parents and 83% of those with household incomes over 75k use at least one subscription service. 59% of Millennials agree that subscription-based products or services offer value for money, compared to 35% overall.
“Flexible subscriptions are well-suited to a consumer’s desire for more choice and control across all aspects of the customer experience. These offer customers a way to try something new without having to commit themselves to a long-term relationship – offering a combination of increased convenience, competitive prices and better service,” said Rachel Aldighieiri, MD of the DMA.
The DMA’s Customer Engagement – Acquisition and the consumer mindset report examines the relationship between members of the public and brands during moments where consumers question whether to try a new brand or stick with what they know.
According to the research, companies should continue to assess how more flexible buying options can help attract new customers, with long-term loyalty building being the ultimate goal. For example, 45% of subscription users agree they would like to pay for more products and services in this way rather than paying outright.
Most consumers believe price, quality and discounts are all key drivers to switch to a new brand. In the post-GDPR era, not only do consumers want more control, they actively seek the best value – the majority agree they would consider switching to use a new company if they offered cheaper prices (76%), better quality (76%) or a discount (72%).
“These findings reinforce one of the DMA’s key principles – to put the customer first. Ultimately, it is the consumers’ choice over what services they use meaning that businesses must continue to earn their loyalty and trust by focusing on customer needs and putting them in control,” added Aldighieri. “Consumers want the best service possible at the best value and so organisations must be willing to demonstrate that they can offer this.”
Offering discounts, better prices and quality are clearly useful strategies to businesses when trying to attract new customers, and this becomes more apparent when compared with other survey findings. When making new purchases, just 24% say they consider retailers they haven’t used before.
Scott Logie, Chair of the DMA’s Customer Engagement Committee & MD of ReaD Group Insight stated: “In the post-GDPR era, finding new ways to engage with potential customers is clearly a significant challenge The fact that just 24% of respondents would consider a new provider when making a purchase means that businesses need to find new, creative ways to stand out from the competition. Clearly competitive prices, discounts and having a great product are still very important, but organisations must be willing to diversify their customer engagement strategy.”