6 Reasons Why People Have Stopped Buying Products
Why would anyone buy a product when they can have all the benefits with none of the risk?
Your company printer doesn’t actually belong to your company.
Companies used to buy products such a printers and photocopiers, but they don’t any more because there’s a better way to get the benefits the technology.
Smart businesses don’t want to shoulder the burden of owning a product if they don’t have to. Instead, they pay a subscription fee for its supply, use and maintenance.
Software providers were among the first to realise that people, where possible, don’t want to own products, and they pioneered a new approach via Software as a Service (SaaS). Since then, many have followed suit, some more surprising than others.
Instead of buying razors ad hoc you can subscribe to a monthly service and have them delivered to your door.
Rather than buying an industrial air compressor you can subscribe to ‘Air-as-a-Service’.
If it’s not the right time to be responsible for a dog, you can subscribe to a platformwhere you can arrange to borrow other people’s dogs for a few hours instead.
From the conventional to the unexpected, people have stopped buying all kinds of products in favour of subscription or service models, and with good reason too.
1. People don’t want to own depreciating assets.
The second you drive a new car out of the garage, it loses 10% of its value. You’ve just spent your hard earned money on something that’s now worth 10% less, and you’ll probably want to sell it someday.
It’s the same for all products. You invest your money in something which depreciates in value as time goes on.
2. People don’t want to take the risk.
If it breaks, you have to fix it. You’re taking on risk of ownership. When you buy a house, you inherit all of its maintenance issues and ongoing running costs.
If you don’t own it and instead it’s provided as a service or a subscription (or rented, in the case of the house), the service provider often takes on the burden of maintenance, repair or upgrades.
3. People don’t want to be locked in.
Once you buy it, it’s yours. You better hope you made the right choice because you’re probably stuck with it.
But subscriptions or services often have flexibility built in. You can upgrade to get more if you need more, or downgrade to pay for less if that better suits your needs. You can also cancel altogether in many instances if it simply isn’t working out.
4. People want value for money.
If you buy a product, you get all the features and benefits of that product – but only that product.
If you subscribe to a service on the other hand, you often get the benefits of a suite of products. Think Netflix vs DVD box sets.
5. People don’t want to have to support their purchases.
If you buy a lawnmower to cut your grass, you need a place to store it. You’ll need to fill it with fuel when it is empty. And, you’ll need to know how to use it.
Often, the true cost of ownership includes the additional support costs required.
6. People want the service.
When you buy a product, the seller is often under no obligation to ensure you get value out of it. That’s on you.
Service and subscription providers, on the other hand, are thoroughly invested in your experience. If it’s not positive, you’ll cancel and stop paying them. As a result, they are more likely to be helpful and provide you any support you might need to get the most value out of the service.
All this considered makes us wonder what will happen first; will people think companies are mad if they continue trying to sell products which could be services?
Or will people think others are mad if they continue buying products which could be services?