Anyone who has a mobile phone, uses a cable or satellite TV service, streams music, or even is a member of a gym is familiar with the subscription-based model for buying things. Billions of consumers world-wide are subscription customers.
In the business-to-business world the subscription-based, or on-demand model, is also increasingly pervasive. Software is one of the most common examples, where organisations often buy programmes, like accounting or customer management systems, via subscription rather than purchasing a fixed number of licenses.
Subscribing to things, rather than buying them outright, is a much more digitally relevant model, where customers buy what they need, when they need it. Instead of having thousands of CDs and a device at home, we simply have one device. Instead of having multiple racks of servers in an air-conditioned room, businesses just need one.
However, the subscription-based model also requires new types of customer interactions. For example, we rarely purchase subscription products in person. This means customers no longer interact primarily with sales staff; we interact digitally with whoever is responding to our webchat or emails; and with our peers, via social media.
Thanks to social media, the customer community has more power and influence than at any time in history - power that can enhance, disrupt or destroy companies almost overnight. At the same time, subscription-based models require regular interaction with customers to keep them buying: think of those sneak peeks that we get via Facebook that make us try an album from a new band.
Consequently businesses need to create an engaged and vigorous customer community that will help to promote their brands and keep customers interested.
To successfully build this community - and therefore delight their 21st century customers - businesses need to understand the importance and details of the customer experience, regardless of channel. By understanding this, they will be better able to act upon those insights, engaging their customers in myriad ways and generating positive outcomes.
For example, using data from its customer relationship management system, an online software company could send a business customer discounts for additional seats, because it knows that the particular company is growing fast. Or, using data from sensors embedded in customers' MP3 players, a music streaming company might notice a customer has suddenly been listening to music late at night and send them some samples of calming tracks. Relevance, personalisation and the anticipation of customer needs are vital considerations for how organisations use information to engage both business and consumer customers.
This is just the start of a bigger migration towards true digital business, where such understanding pervades every aspect of the organisation's thinking.
Subscription models are fast becoming the norm in our increasingly digital society, but the upshot is a much greater need for businesses to understand and create active two-way conversations with their customers. Most importantly, the key here is the term 'understand' as without this, there can be no meaningful relationship.