Subscription services for the things we buy and consume have become so ubiquitous we’re starting to consider brands who don’t offer a subscription as outliers. Think about that: in only the last decade, subscription services have sprouted up in the consumer market, fundamentally changing our expectations, tastes and demands. The notion of flexibility is an underlying factor that sits behind this trend, along with the experience of “belonging to a group”. From razors to holidays to streaming videos, these services offer unprecedented ease, as well as a sense of brand identity.
This model makes a lot of sense on both sides. It’s easier for businesses to scale and run, while guaranteeing recurring revenue, and it delivers great convenience for customers (for more, I recommend Shep Hyken’s recent conversation with Tien Tzuo, founder of Zuora, which unpacks the subscription economy writ large); yet it also puts the emphasis increasingly on experience - from branding, to design, to service - particularly as subscriptions become less differentiated at their core. Think no further than Lyft and Uber - very similar services, with very different brand identities.
Service Automation for Subscription Businesses
Let’s look at how service automation can be a game-changer for subscription models. These businesses encounter two primary interaction types: transactional and emotive. For the transactional type, these are the high velocity, but low value interactions - things just need to get done, such as pausing a subscription, requesting an upgrade, or getting a refund. Customer service teams get a lot of these types of requests, and as long as they’re handled quickly, customers are happy. The second type, emotive, are reserved for the one-offs, complex questions, complaints and so on. These are opportunities for the business to live its values, to differentiate through service and to genuinely build relationships with customers one to one. The latter should not be automated, the former, on the other hand, has rich automation opportunities.
Any transaction involves customer effort, and often where money is involved, customer stress comes along for the ride. Minimizing effort and stress is what subscription models are based upon, so if a subscription business lacks a service infrastructure to match, how will they stack up to competitors? AI has the ability to recognize specific, transaction based use cases and once categorized, can automate specific processes and actions. In this world, customers get a reply instantly, and agents aren’t even pulled away from more complex tasks: a true win-win. Your customer can move on with their day without worrying about getting that refund; with automation, you’ll have delivered them peace of mind.
Now there are examples where subscription businesses don’t have total control over their service; a food box service that relies on a courier, or a streaming company the relies on the public internet. As a sports fan, the second example is a personal fear of mine. Imagine the following, if you dare: you invite a bunch of friends over for a knockout game of the World Cup; everyone is excited, cold beers in hand, the national anthems start (some friends possibly start singing along), and then - you lose the feed. Absolute calamity ensues. This is also where customer indignation begins - being denied a service they’ve already paid for. However, it’s not the fault of the streaming service; the blame sits with the public internet company. This kind of backlog obviously impacts the customer, yet it floods customer service with a one-off incident, which can be solved by routing directly to the provider, which allows the business to keep track of provider complaints. A quick reply in these instances is crucial to keeping customers on your side, even when negatively associated with a third party provider.
While this is all nice in practice, practical examples are critical. Online education business Course Hero is already automating a fair chunk of transaction processes end-to-end. With the growth of their subscriber base, Course Hero was forced to consider how much time and resource they were devoting to customer experience, vs. dealing with necessary transactional tasks like subscription renewals and billing, and if this ratio could be improved without hiring additional staff.
Course Hero were able to automate 20% of customer service volume by applying the DigitalGenius AutoPilot solution to their support operation. This level of ease and convenience has been a further differentiator for Course Hero, yielding impressive CSAT scores and ensuring that their customers stay loyal - even those pausing their subscriptions.
Subscription businesses use their inherent model to differentiate and make life easy for customers, yet as we’ve shown, unless service keeps up, there will be a disconnect between their brand appeal and the actual experience of working together. Nice to know that there are forward-looking ways to guard against this (more here, here and here).