From my last post, you’ve realized that the spectrum of subscription services being offered now is expanding at a shocking rate. From pet rentals to movies to men’s luxury goods, everything is in play. But what are the older, already-established companies doing? Many of them seem to be reinventing their models now – moving away from the one-time purchase model to the subscription-based model. A good example is Ingersoll-Rand, the parent company for Schlage locks. Schlage now has an offer, where you buy a lock, and then a subscription service to monitor the lock status from any mobile device.
So why aren’t more companies following suit? Well, you could name a multitude of reasons: inability to innovate, poor leadership, failure to see market trends. The list goes on and on. But let’s be honest, these companies didn’t become big companies by embodying these traits. They were all innovators, had/have great leadership, and got in front of market trends to stay ahead.
One big reason companies don’t offer subscription services is because of antiquated billing systems that are in place. These systems aren’t able to support subscription models. It’s not a lack of leadership or vision, it’s the billing system that’s preventing them from doing it! A similar trend took hold when credit cards became more mainstream – more people had them, so more people were using them. The businesses that only accepted cash and checks were forced to do one of two things: start embracing credit cards, or crumble.
Now, I’m by no means producing a doomsday theory here for companies using antiquated billing engines, but if you knew your livelihood depended on changing something fundamental, wouldn’t you at least be open to it? Expect the big guys to start coming out in full force soon. They are still innovators and thought leaders. It’s all in due time.
– Nik Divakaruni
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