September 14, 2020

The Subscription Model: What it is and How it Can Benefit the Cleaning Industry

Computer positioned on office table

Welcome to the Subscription Economy! Most people now subscribe to at least some form of entertainment whether it is Netflix, Amazon Prime, or Spotify, if not all three. 

The entertainment industry is not alone in its offerings of subscription services—the tech software industry is leading the way with cloud storage applications and regular software updates and upgrades that many companies subscribe to regularly—instead of buying annually and then spending more time and money to maintain throughout the year.

Clothing, health, beauty, food—we are no longer in a world of newspaper and magazine subscriptions—we are in a world of “all things subscription.” 

In a recent podcast on The Economist website, Tien Tzuo, CEO of Zuora (a software company that helps businesses launch and manage their subscription-based services) called this emerging trend the “subscription economy.” 

During the podcast, Tzuo points out “why even buy a car...this whole trend is what we call the subscription economy, the idea that you and I no longer have to buy products to meet our needs instead we can simply subscribe to our favorite services.” 

What is the Subscription Model?

The basic workings behind the subscription business model are that a consumer has “access” versus “ownership” to the specified item. And there is good reason. Global idea shifts in what it means to “house things,” greater focus on health and the environment, and the rapid pace at which technology develops, all make it less desirable to “own” things—especially when having a subscription means regular access to “new”, regular upgrades, and in some cases less responsibility for the user. 

Subscription models vary in design, there are six coined names, or types, at this point, but most offer affordable pricing that is in line with buying a product outright, however the consumer gets added access to more “service.” Some businesses even offer “subscribe and save” programs which give the consumer a discount if they sign up for the subscription. Subscription pricing is part of the draw. 

A recent article from The Economist notes: “Subscriptions keep customers loyal and deliver predictable recurring revenue, plus a stream of data about customer behavior that providers can use to refine their offerings.”

In essence, subscription model services benefit both the provider and the consumer—not only due to data collection but also in terms of service. A provider will be just as invested in the product as the consumer due to the reciprocal nature of the subscription model. In order to keep consumers from changing companies or brands, providers will need to make their subscription model stand out—and many times that will come from the services they offer—included in the set price.

3 Ways The Cleaning Industry Can Benefit from Subscription Services

The basis of the subscription service model is that the consumer gains access to the item needed at a set monthly rate, versus paying a large upfront sum. The Economist points out: “Customers, for their part, can turn high, variable, up-front costs into low, fixed, recurring ones.”

The benefit lies in subscription pricing programs that often equal easy budgeting without a lot of hassle should something break or go wrong—which in many cases can add on large sums of money to an already expensive item. 

This is true for floor cleaning equipment as well. Companies that offer a subscription service work off the same premise. The consumer gains access to the equipment for a set monthly payment and for a certain period. Once the subscription period runs out, the consumer can decide to start again, with newer updated equipment. 

The subscription model helps both the provider and the consumer for many reasons: 

Data Collection: Benefits to Provider and Consumer

For one thing, the sophistication and level of intelligent cleaning equipment on the market is reason enough to subscribe. Many of today’s floor scrubbers and sweepers are built with advanced data tracking technology, like ICE Cobotics’ i-SYNERGY, which is included in their subscription at no extra cost, that gives both the provider and the consumer access to all kinds of sophisticated technology and software like fleet tracking

Fleet tracking allows end users to monitor large fleets easily, whether through an app or computer; the systems allow for easy access that supplies a “global” perspective—depending on size of fleet and whereabouts of equipment. On top of that, end users can view information such as: how often a machine runs, who operates it, duration of operation, and any issues that occur during operation.

For many in the industry, such as BSC’s, the ability to view large fleets from one location is a huge time saver. It can eliminate area managers from having to travel between sites to make sure equipment is being maintained and running efficiently. 

Access to Preventative Maintenance

Data Collection also means the ability to track when equipment in the field is operationally challenged. Equipment breakdowns for the floor cleaning industry mean a direct loss of time, easily up to a week's worth of cleaning, and profit—lack of productivity. In a typical scenario, equipment breakdown means calling a technician to diagnose the problem, scheduling a time for the technician to diagnose the problem, waiting for parts, and then waiting for the technician to come back and repair the problem once parts have arrived. 

Using a company that offers a subscription model means the provider is keeping an eye on the equipment along with you. It is just as important to a provider for the equipment to stay in operating condition as it is for the user—as the provider is technically the owner. They have stake in the handling of the equipment, and it is important to the bottom line. 

Data collected by the provider helps to determine timeframes for when certain parts wear out, thus creating benchmarks to get ahead of problems. In addition, should a technician need to be dispatched for a repair, the trouble shooting that is done virtually, ahead of time, can help with the diagnosis before even being on site, meaning less time spent on multiple trips. 

Due to the access to data the technician can review ahead of time, figure out and collect the parts they need, and review collected data for any other parts that may be wearing out. In one trip, the equipment is repaired and serviced allowing it to run longer without issue, as data was used to figure out potential future problems ahead of an occurrence.

It is also important to note, that by using subscription services and allowing providers to collect and monitor data, they can continue to develop their product to be more efficient and helpful to the end user. Data collection is essentially “live” research for the provider and the end user. 

Regular Software Updates

Along with access to fleet tracking and preventative maintenance is access to regular software updates that can make a big impact on the equipment. In the past, gaining access to software updates meant paying the provider for the new update—often very costly but significant to the functioning of the product—or waiting to buy the next version of the equipment—most of the time seven to ten years. 

Subscription services typically include these updates as part of the monthly payment. For example, ICE Cobotics' Cobi 18, an autonomous floor scrubber relies on regular software updates to continuously update and improve the robot. Software updates like these provide consumers with new functions and capabilities that they would normally not have access to without another large investment. 

Zuora’s website recently released data on the increased demand for subscription services citing Daniel McCarthy, Professor of Marketing at Emory University as saying: “While there are many reasons why people derive value from subscription-based relationships, the ease and convenience of an ongoing service and spending less money to access it are two of the most compelling and durable reasons to subscribe.”

Access to software updates that directly affect efficiency and productivity of staff and robotics equipment are available to end users much more quickly than if the consumer bought the equipment outright—normally they would be left using outdated technology until the next large equipment purchase was in the budget. 

Positive Impact on the Floor Cleaning Industry

For an industry that regularly faces high turnover and absenteeism, subscription services can alleviate some of the stress. Having access to services and updates allows managers to focus on the staff knowing the equipment will be taken care of by a professional in the industry.

On top of that, access to maintenance services by experts takes pressure off on-site technicians to try and figure out equipment they may not be familiar with—reducing downtime and increasing productivity.

ICE Cobotics is an industry leading floor cleaning equipment provider. We offer subscription services for all our equipment and our subscription model includes fleet tracking (at no extra cost), maintenance and parts, and continuous software upgrades. For more information please reach out to our Automation Exeperts.

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