Greg Tyler

On enduring consumer relationships

Published on

More and more companies are providing services rather than products, creating an enduring relationship for customers who buy into the brand. What impact does the have?

As a company, selling a service is often much more profitable than selling a product. For example, a £100 sale is great, but a service charging £10 a month for a year will net you more income.

As such, many things that we would typically buy are now available as services: you can get monthly subscriptions for clothes, groceries, entertainment and toiletries. These subscriptions often cost consumers more and contribute to growing global problems of negative equity.

They also create a much closer relationship between business and consumer. Whilst traditional grocery purchasing gives you the opportunity to try different stores and shop around, subscription services lock you in to a provider.

These relationships, far from side effects, are the entire point of offering services rather than products. Service providers’ successes are dependent on tie-in, and they will try their hardest to make it difficult for you to leave.

This model of ever-closer relationships between supplier and consumer extend into other industries too. Video games have gone from being one-time purchases, to having downloadable content, to micro-transactions to the new “season” format.

In this format, video games typically release new content with each season, potentially changing the game drastically. Whilst on the surface that content is free for everyone, most of it requires purchasing a “season pass”. This becomes a subscription-like situation: players pay every season for new content and features.

The twist here is that seasons increasingly make it difficult to opt out. Certain features often require an upgrade, or are realistically unplayable without the additional content from the season pass. Notably, once you stop paying the season pass you stop having access to things you’d already paid for.

This brings us to “smart” products: home devices connected to WiFi to provide extra functionality. A promise of these devices is that they can update “over the air” and you’ll have access to new features without having to pay for a physical upgrade.

The issue here is that those virtual updates will only work for as long as the company provides them. As with computers and phones, eventually your device will fall out of favour and stop receiving updates. This “end of life” can often fall sooner than the expected life of non-smart alternative.

If you’re really unlucky, a bodged update or a change in business can make your product unusable. As with video game season passes, you can lose access to something you’ve already paid for at the whim of the provider.

All of this didn’t used to happen. I have video games from twenty years ago that I can still play all of. My kettle will work until the parts break, and I can probably replace them. But there’s an increasing trend to subscriptions, seasons and smarts, and it’s all made out to look like a benefit to consumers.

If you want to buy a new TV, it’s hard to find one which isn’t “smart”. You’re forced to pay the premium for features you might not want and the additional risk of the firmware breaking (not to mention the privacy violations).

We need to break the cycle on this. We’re becoming increasingly dependent on businesses staying afloat, and paying much more for the privilege. Subscriptions are masking the actual cost of services. We’re losing our grip on ownership.

If you want to buy something, try to just buy it. Avoid the additional features you don’t need, avoid the spyware, avoid the stretched-out payments that will cost you more. Avoid the promise of more stuff, avoid the “ongoing updates” which could stop at any time, avoid things which randomly need WiFi.