INTRODUCTION

As part of my Bootcamp program, I built a budgeting app, and I am excited to share this case study with you all.

My role in this project was to carry out extensive research, identify the problem and build a solution. I was the lead product designer for the project.

SCENARIO
The company is looking to create a mobile version of the subscription app product that a broader audience can use. They want to build a mobile version of the app that will significantly increase market reach. The business goal is to get more users and business.

TARGET MARKET

• The majority of users are over 30 years of age.
• They use phones and desktops equally.
• Middle class and trying to be more budget-conscious.

RESEARCH, RESEARCH AND MORE RESEARCH

The first step was to learn and understand more about the psychology around consumers' buying behaviour, how subscription models affect our spending as users and how buying behaviour evolved post-covid. So let’s start with the principles behind subscription models.

With growing technological changes, subscription business models have become very common, especially in the SAAS industry. For businesses, a subscription model benefits them with long term customer loyalty, predictable revenue, and not to forget that customers are more attracted to subscription models. As users, you know you are getting access to high-quality service at an affordable price that will improve with time. If you rely on an app for business, hobby or security, it is wise to invest and keeping them up to date.

To know more about the history of subscription models read, https://www.linkedin.com/pulse/surprising-early-history-subscription-model-ajay-jain/.

HOW SUBSCRIPTION MODEL WORKS

Consumer behaviour specialist at LSE mentioned, ‘Free subscription trials are particularly effective because people are prone to inaction, especially if the renewal is automatic and they have to opt-out.’

WHO ARE SUBSCRIPTION SHOPPERS

A study by McKinsey & Company describes subscription shoppers as “younger urbanites, 25–44 years old, with incomes from $50,000 — $100,000 living in urban environments in the Northeastern United States.”

WHAT SUBSCRIPTION SHOPPERS WANT

• Instant gratification with personalisation intrigues them — shoppers like being rewarded through loyalty programs that earn points.
• Flexibility, loyalty and personalisation
• Critical triggers for consumers to sign up with a subscription service includes recommendation through word of mouth and positive online reviews.

WHAT CHANGED AFTER COVID
The pandemic tested brand loyalty. With more demand and a limited supply of goods, customers left their comfort zone and tried available brands there. We saw a surge in digital adaptation. A study done by Mckinsey & company suggests that we will continue to see a rise in e-commerce, preference for digital entertainment, rise of e-pharmacy and e-doctor. They also noticed a new trend in customer behaviour — Consumers are trading down and are more price sensitive.

SURVEY REVIEW & FINDINGS

I sent out a short survey to get quantitative data about subscription services, understand user behaviour around managing their subscriptions and validate the hypothesis. I received 26 responses, where 44% of the participants had at least more than three subscriptions.

Over 76.9% of the users prefer monthly subscription services over yearly.

84% of the candidates agreed to have forgotten to cancel a subscription and be charged for it. This reflects the theory of how timing affects consumption among users. Payments made long before or after the actual purchase reduce attention to a product’s cost and decrease the likelihood of it being used. *

54% of the candidates keep track of their services through bank statements, followed by 27% using other apps.

75% of the participants would not cancel the service if it got auto-renewed to avoid penalty or in hopes that they would use it in the future. There are two reasons for this pattern — the guilt of spending money and not using the service and the psychological need to link the payment with benefits.

Read more about pricing and consumption at https://hbr.org/2002/09/pricing-and-the-psychology-of-consumption.

COMPETITIVE ANALYSIS

I conducted a competitive analysis on Track my subs.com, Subscription manager and True bill to learn about the user interaction designed for these applications and discover the gaps in the user experience of these apps.