Creating a Higher Perception of Value for Subscription Products.

According a report by ING, tangible product subscriptions are not growing at the same exponential rate as information or digital subscriptions simply because consumers are still comparing subscriptions to one-off purchases.

As a result, subscriptions are seen as more expensive on the first glance. However, the willingness to pay more increases if the perceived value is higher in comparison to a one-off purchase.

In this article we've highlighted two things we want you to think about before you ideate your next big marketing campaign for your subscription business. 

  • Who's your competitor.
  • Is your product functional or symbolic in nature.

#1 Who’s your competitor

Companies that are selling their products for one-off purchase or companies that are offering their products on a subscription basis?

Here’s why we’re asking. 


In the report, Opportunities and challenges for tangible goods subscriptions, ING highlighted that even though “more Europeans expect to subscribe to additional tangibles than to churn” the potential for growth still falls behind information goods simply because subscriptions are still being compared to one-off purchases and as a result seem more expensive in comparison. 

But they also highlight that consumers are willing to pay more only if the added value is seen as higher. 

Pay attention marketers, it says “value is SEEN as higher”. Ergo value is intangible. Value can be seen as a perception of the consumer, as it refers to the benefit that a customer PERCEIVES they receive from a product or service relative to the price they pay. 

The good news is that this perception of value can be influenced by factors such as:

  • Quality of the product (which we believe is awesome of your product)
  • Brand reputation (good-quality product = better reputation) 
  • Level of customer service (this is where subscriptions shine) 
  • And the overall customer experience (this is were a well thought-out marketing campaign can have an influence) 

Therefore, while value is ultimately determined by the customer's perception, businesses have a role to play in creating value by delivering high-quality products and services, building strong brands, and providing excellent customer service.

Here’s what we want you to do. 

First we want you to identify whether your competitor is other companies that offer their products on a subscription basis or companies that offer their products for a one-off purchase.

If you come to the conclusion that your target customer or perhaps majority of your target customer are comparing you with one-off purchase and are only willing to pay more if the added value is seen as higher, we want you to rethink your marketing strategy and pay more attention to the experience of using your product rather than the product itself. 

(creating a higher perception of value by focusing on the experience)

By focusing on experience, instead of the product itself, you give your customers the possibility to imagine themselves in experiences you create or communicate. Doing so takes the attention away from the price and towards the usage of the product itself.

Here’s an example of Swapfiets. 

Swapfiets, the blue tire bike-subscription company from the Netherlands, that you  probably know about. 

Their mission is simple: an always functioning bike. 

Their target audience: Students

Their price: 15 - 25 euros per bike per month. 

If you ask their subscribers “why pay that much every month when you can get a second hand bike that costs less?”

Most people will tell you that it’s because they don't have to worry about the repair and maintenance, change a tire when its broken or take out time from their schedule to repair their bike or let the bike be repaired and pay a huge fee for that. 

They just want to ride a bike, cruise around and enjoy summer. 

Conclusion: if your perceived value is high enough, your consumers will come up with their own argumentations for why they’re subscribed to your product instead of buying one. 

Makes sense, doesn't it? 

Swapfiets, has successfully brought across the message that even though the subscription price is higher than one-off purchase of a second hand bike, the service their subscribers get in comparison is very high and incomparable. 

We have another example for you: The Apple iPhone 11 launch ad. 

We want say much, but we want you to watch the ad again and see how Apple brings across the message of their iPhones having the following:

  • All day battery life (hint: the battery percentage at the end of the day)
  • Water-proof (hint: all the realistic real-life spillage incidents)
  • Scratch-proof (hint: the phone in bags with objects like keys) 
  • Face ID (hint: again realistic situations of using face ID)

The list goes on, but we’d like to stop and say that, it’s all about the experience your customers have with your product and you need to start highlighting that in your marketing campaigns. 

#2 Is your product symbolic or functional?

The next thing we want to ask you is does your product appeal to the symbolic side or the functional side of your target customer?



Let’s us clarify the terminologies.  

So symbolic products,  as the name suggests are products that provide some sort of prestige, pride or self-identity to the customer.

Functional products well are functional and solve a functional need. 

A product can be either one or both. 

Let’s bring back Swapfiets and explain. 

The functional aspect of a Swapfiets bike is to have an always functional bike that gets you from point A to B. 

The symbolic aspect of having a Swapfiets bike is to be part of a revolution, the sustainability era and be associated to a group that drives around with the blue front tire bikes. 

Conclusion: once you’ve figured out the symbolic and functional aspects of your product/brand, you can position your product accordingly with marketing messages and communication. 

You can decide to go either way or have best of both worlds. 

So these are the two things we want you to think about for today.

We’ll be back with more.

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