It’s not a secret that young Americans of the millennial generation are in different financial straits than their parents. Many of them have thousands of dollars of student loan payments – which necessitates hefty monthly bills – so they’re not making large purchases such as homes and vehicles at the same rate that older generations did. Instead, they’re looking for goods and services they can pay for monthly. For this reason, young people are driving what’s becoming known as the subscription economy.
Since younger people don’t have the lump sums for large payments, they prefer to buy on a month-to-month basis. In fact, 92 percent have active subscription services, according to a recent survey conducted by Vantiv and Socratic Technologies. According to recent data from the Consumer Technology Association, music and video streaming services alone are projected to generate close to $32.3 billion in revenue in 2020. Add in everything else younger Americans are buying by subscription such as clothing, cosmetics, wine and beer, shaving supplies, musical instruments, and even cars, and the potential of subscription selling becomes enormous.
For these younger Americans, the subscription economy offers an option that’s simple, predictable, recurring and tailored for them. It’s probable that as this generation ages and becomes more financially secure, their subscription habits will likely stay with them. For this reason, it makes sense for companies to marketing subscription services towards the millennial generation for the long term.
How Do Subscriptions Benefit Your Business?
One of the biggest benefits of a subscription model is more regular and predictable cash flow. For smaller businesses or new businesses, the subscription model provides an opportunity to compete with larger or better-established companies. With an understanding that young American consumers are the highest adopter of subscription services, companies should be placing marketing dollars towards that demographic today to ultimately increase company value. It’s vital, however, to have an effective infrastructure for subscription management in place.
Look for a Dedicated Subscription Management Platform
Subscription DNA’s subscription management software is ideal for small businesses, and features group enrollment tools and group communications, email marketing automation, cloud billing automation and payments, intuitive membership management, CRM and premium content and paywall management. Your customers can even log in and manage their own accounts right from your Web site.
Even small businesses just beginning to use the subscription model can quickly and easily build the type of community that keeps subscription customers engaged, interested and loyal.
Contact Subscription DNA to learn how you can market to, communicate with and support younger consumers.