Time was, if you wanted to watch a movie at a time you chose, you had to get in the car, drive to a Blockbuster, and hope they had the film.
They usually would, as long as it was a … um, blockbuster. Things got more challenging if you wanted to watch a documentary or foreign film.
A further bummer was late fees. Remember those?
If an industry doesn’t adapt, it’s gone
But Blockbuster was basically the only game in town. At the company’s peak, in 2004, there were 9,000 Blockbuster outlets across the country. The company was riding high. The company founder bought the Miami Dolphins.
But then: the internet.
Here came Netflix. Here came subscription pricing. There went late fees. Here came streaming.
There went Blockbuster.
Oh, Blockbuster. We hardly knew ye.
It’s an archetypal tale of disruption. An industry gets big, gets complacent, gets greedy, and then, if it doesn’t adapt, gets gone.
For better or for worse, disruption has become the M.O. of business. And the go-to buzzword for marketers everywhere. Sigh. Maybe we should start calling it “blockbustering.”
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Blockbustering is happening in every industry. Music. Books. Ride-sharing. Dinner. Razors. Coffee. House plants. Bacon. Well, almost every industry. There’s at least one industry that’s still a big, fat target for blockbustering.
But disruption is a-coming, and not a moment too soon. Too much of the payment processing industry remains unaffected by tech disruption because, at the end of the day, the same opaque and tricky practices surrounding price and service remain.
Too many community businesses have been deceived by sleight-of-hand sales tactics from merchant processors. Too often are merchants are told one rate only to end up paying way more. Too often shop owners are tricked into signing iron-clad leases for equipment only to wind up paying 10 times the actual equipment cost over the term of the contract.
Those are the kinds of things we wanted to blockbuster the snot out of.
So we did. We created Gravity Instant, a subscription payment processing option.
A step in the right direction
The good news is that, when they’re done right, subscription-based models have a core set of characteristics that serve customers’ best interests. As the Harvard Business Review reports, subscription-based models require three things to succeed.
First, the market-service fit has to be in place before the subscription idea can take hold: “You need to be sure that once target buyers try your offering, they will love it and will want to continue paying you forever,” according to the article.
Second, you have to focus on the right metrics. Effective subscription models are about “lifetime customer value” over “new customer acquisition.” In other words, after you come through the door, the business needs to give you a reason to stay.
Third, you need to have a culture of membership. “Membership,” the article points out, “is a mindset. Successful membership businesses focus on the long-term relationship.”
While a subscription model isn’t a guarantee of excellence, it’s step in that direction.
A big, blockbustery step.
Note: This post is the second of three on subscription-based payment processing. Part 1 is: How Do Payment Processors Try to Rip You Off? Let us Count the Ways. Part 3 will be published next week.