The Intersection of Consumer Subscription Businesses and Collecting: Strategies for Success

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Hatched by Glasp

Aug 25, 2023

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The Intersection of Consumer Subscription Businesses and Collecting: Strategies for Success

Introduction:

In today's market, building a successful consumer subscription business can be a challenging task. Retaining customers and expanding into new segments is crucial for long-term success. Similarly, collecting has evolved from a hobby to a compulsion for some individuals, reflecting a fear of scarcity or a desire to preserve valuable items. Surprisingly, there are common points between the world of consumer subscription businesses and collecting practices. By exploring these connections, we can uncover valuable insights and strategies for building a thriving consumer subscription business.

Network Effects and Product Expansion:

It is widely recognized that single-product solutions often struggle to maintain long-term retention without the support of network effects. However, if network effects are not applicable to the product you offer, launching new products can significantly benefit your business. By expanding your product line, you can better monetize existing customers, open up new customer segments, and ease the burden of customer acquisition. Calm, for instance, successfully scaled its Sleep Stories product, which not only increased retention rates for its meditation customer base but also attracted a larger market interested in sleep. This highlights the potential of targeting everyday habits that have a broader appeal compared to niche practices like meditation.

Collaboration and Bundling:

Collaboration and bundling have proven to be effective strategies for consumer subscription businesses as well as collectors. Spotify, in its early days, experienced remarkable growth through its playlist sharing feature, which encouraged users to share their favorite music with friends and publicly on the internet. This not only attracted new audiences but also improved retention rates. Additionally, Spotify and Hulu's collaboration through bundled subscription models helped both companies expand their reach and retain customers. By finding synergies between different products or services, businesses can tap into new markets and enhance customer loyalty.

Expansion into B2B Offerings:

Consumer subscription businesses can also explore the opportunities presented by venturing into the B2B sector. By creating B2B offerings, businesses can target a new customer base while leveraging a different acquisition loop in sales. This approach allows for the acquisition of hundreds to thousands of users simultaneously within companies. Successful examples of this expansion can be seen in the journeys of Headspace and Calm. These companies, originally rooted in the consumer market, have successfully expanded into the B2B space, further enhancing their growth and revenue potential. This strategic move can lead to tremendous venture outcomes, as exemplified by the valuation of companies like Duolingo, Spotify, and Netflix.

The Historical Significance of Collecting:

Collecting, in its various forms, has existed throughout history. In ancient Mesopotamia, collecting practices were observed among royalty and elites, dating back to the 3rd millennium BCE. The Medici family, during the Renaissance in Florence, played a pivotal role in the advancement of art collection through private patronage. This tradition continues today, with private art collectors supporting artists and enabling them to create freely. The collecting hobby, in its modern form, can be traced back to the "cabinet of curiosities" popular among scholars from the 16th century onwards. This fascination with acquiring unique and unusual items persists to this day.

Conclusion:

Building a successful consumer subscription business requires strategic thinking, innovation, and a deep understanding of customer dynamics. By drawing parallels between the world of consumer subscription businesses and the practice of collecting, we can gain valuable insights and strategies for success. Remember, expanding product offerings, collaborating with other businesses, and exploring the B2B market can be game-changers for your business. By implementing these actionable advice, you can enhance customer retention, attract new audiences, and ultimately build a thriving consumer subscription business that rivals even the best B2B subscription companies.

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