August 30, 2021

Whoop

There it is:  saw this advertised during PGA Golf over the weekend (click here).

With Fitbit you pay for the watch ... an up-front purchase. And yes, they have a premium service. But by and large, you buy a product.

Here you pay $30 a month or some annualized amount that is less than $30 a month, and in exchange you get various analytics that allegedly aid your athletic performance.

Certainly Whoop isn't the first company to offer a subscription service.

From a Customer Development standpoint, subscriptions change repurchase habits. When you buy a Fitbit, you spend $159 or $299 or whatever and then the unit functions for a couple of years. Money is exchanged up-front, repurchase is minimal thereafter until the unit fails or no longer meets the needs of the customer. Meanwhile, subscriptions filter out the customers who are not interested in repurchasing each month. Customers are actively filtered out in ways that a classic e-commerce brand wouldn't dare dream of. But the subset of customers who are left spend $30 a month or whatever. Repurchase rates, if you will, are high.

All of us make choices with our businesses, don't we? Our choices determine how our Customers Develop.

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